HomeMy WebLinkAbout2014 - Department of Finance - Comprehensive Annual Financial Report City of Lansing,
Michigan
cHIG �
Year Ended Comprehensive
June 30, 2014 Annual Financial
Report
Prepared by: Department of Finance
Finance Director
Angela Bennett
Accounting Manager
Randy Endsley
CITY OF LANSING, MICHIGAN
Table of Contents
Page
INTRODUCTORY SECTION 1
Elected and Appointed Officers 2
Letter of Transmittal 3
Table of Organization 8
GFOA Certificate of Achievement 9
FINANCIAL SECTION 11
Independent Auditors' Report 13
Management's Discussion and Analysis 17
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position 32
Statement of Activities 33
Fund Financial Statements:
Balance Sheet - Governmental Funds 38
Reconciliation of Fund Balances of Governmental Funds
to Net Position of Governmental Activities 39
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds 40
Reconciliation of Net Changes in Fund Balances of Governmental Funds
to Change in Net Position of Governmental Activities 41
Statement of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual:
General Fund 42
Statement of Net Position - Proprietary Funds 46
Statement of Revenues, Expenses and Changes in Fund Net
Position - Proprietary Funds 47
Statement of Cash Flows - Proprietary Funds 48
Statement of Fiduciary Net Position - Fiduciary Funds 52
Statement of Changes in Fiduciary Net Position - Pension and
Other Postemployment Benefits Trust Funds 53
Combining Statement of Net Position - Discretely Presented Component Units 58
Combining Statement of Activities - Discretely Presented Component Units 60
Notes to Financial Statements 61
CITY OF LANSING, MICHIGAN
Table of Contents
Page
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios -
Employees' Retirement System 116
Schedule of the Net Pension Liability - Employees' Retirement System 117
Schedule of Contributions - Employees' Retirement System 118
Schedule of Investment Returns - Employees' Retirement System 119
Schedule of Changes in Net Pension Liability and Related Ratios -
Police and Fire Retirement System 120
Schedule of the Net Pension Liability - Police and Fire Retirement System 121
Schedule of Contributions - Police and Fire Retirement System 122
Schedule of Investment Returns - Police and Fire Retirement System 123
Schedule of Funding Progress - Other Postemployment Benefit Plans 124
Schedule of Employer Contributions - Other Postemployment Benefit Plans 124
Combining and Individual Fund Financial Statements and Schedules
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental Funds 126
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Governmental Funds 127
Combining Balance Sheet - Nonmajor Special Revenue Funds 130
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Special Revenue Funds 132
Schedule of Revenues, Expenditures and Changes in Fund
Balances - Budget and Actual - Nonmajor Special Revenue Funds 134
Combining Balance Sheet - Nonmajor Debt Service Funds 142
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Debt Service Funds 143
Combining Balance Sheet - Nonmajor Capital Projects Funds 146
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Capital Projects Funds 148
Combining Balance Sheet - Nonmajor Permanent Funds 152
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Permanent Funds 153
Nonmajor Enterprise Funds:
Combining Statement of Net Position - Nonmajor Enterprise Funds 156
Combining Statement of Revenues, Expenses and Changes in Fund Net
Position - Nonmajor Enterprise Funds 157
Combining Statement of Cash Flows - Nonmajor Enterprise Funds 158
Internal Service Funds:
Combining Statement of Net Position - Internal Service Funds 162
Combining Statement of Revenues, Expenses and Changes in Fund Net
Position - Internal Service Funds 163
Combining Statement of Cash Flows - Internal Service Funds 164
CITY OF LANSING, MICHIGAN
Table of Contents
Page
Agency Funds:
Combining Statement of Fiduciary Assets and Liabilities - Agency Funds 168
Combining Statement of Changes in Fiduciary Assets and Liabilities - Agency Funds 169
STATISTICAL SECTION (UNAUDITED) 171
TABLE
1 Net Assets / Net Position by Component 175
2 Change in Net Assets / Net Position 176
3 Fund Balances, Governmental Funds 178
4 Changes in Fund Balances of Governmental Funds 179
5 Assessed and Estimated Actual Value of Taxable Property 180
6 Direct and Overlapping Property Tax Rates 181
7 Profile of Ten Largest Ad Valorem Taxpayers 182
8 Property Tax Levies and Collections 183
9 Ratios of Outstanding Debt by Type 184
10 Ratios of General Bonded Debt Outstanding 185
11 Direct and Overlapping Governmental Activities Debt 186
12 Legal Debt Margin Information 187
13 Pledged-Revenue Coverage 188
14 Demographic and Economic Statistics 189
15 Principal Employers 190
16 Full-Time Equivalent City Governmental Employees by Function/Program 191
17 Operating Indicators by Function/Program 192
18 Capital Asset Statistics by Function/Program 193
INTRODUCTORY SECTION
1
CITY OF LANSING, MICHIGAN
ELECTED AND APPOINTED OFFICERS
For the Year Ended June 30, 2014
MAYOR
Virg Bernero
CLERK
Chris Swope
DISTRICT COURT JUDGES
Louise Alderson
Patrick F. Cherry
Hugh B. Clarke, Jr.
Frank J. Deluca
Charles F. Filice
CITY COUNCIL
AT LARGE BY WARDS
Judi Brown Clarke Jody Washington - 1 st Ward
Kathie Dunbar Tina Houghton - 2nd Ward
Derrick Quinney A'Lynne Boles - 3rd Ward
Carol Wood Jessica Yorko - 4th Ward
OFFICERS
Randy Hannan Executive Assistant/Chief of Staff
Chad Gamble Chief Operating Officer/Public Service Director
Janene McIntyre City Attorney
Angela Bennett Finance Director
William Fowler City Assessor
Antonia Kraus City Treasurer
Terri Taylor Human Resources Director
Randy Talifarro Fire Chief
Michael Yankowski Police Chief
Joan Jackson Johnson Human Relations Et Community Services Director
Brett Kaschinske Parks Et Recreation Director
Robert Johnson Planning Et Neighborhood Development Director
Jim DeLine Internal Auditor
2
FINANCE DEPARTMENT
124 W. Michigan Ave.: 8' Floor
Lansing, Michigan 48933
(51Tj 4834500
61
December 19, 2014
Council President A'Lynne Boles
and Council Members
10th Floor City Hall
Lansing, Michigan 48933-1694
Dear President Boles and Council Members:
We are pleased to submit the comprehensive annual financial report of the City of Lansing, Michigan for the
fiscal year ended June 30, 2014.
The City assumes full responsibility for both the accuracy of the data and the completeness and fairness of
the presentation, including all disclosures. To the best of our knowledge and belief, the enclosed data are
accurate in all material respects and are reported in a manner designed to present fairly the financial
position and results of operations government wide and of the various funds of the City. All disclosures
necessary to enable the reader to gain an understanding of the City's financial activities have been included.
The City's fiscal year 2013/2014 financial statements have been audited by Rehmann Robson, an independent
firm of licensed, certified public accountants. The goal of the independent audit is to provide reasonable
assurance that the financial statements for the City of Lansing for the fiscal year-ended June 30, 2014, are
free of material misstatement. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures contained in the financial statements; assessing the accounting
principles used; and evaluating the overall financial statement presentation. The independent audit
concluded with the rendering of an unmodified opinion on the statements, meaning the financial statements
present, fairly and accurately in all material respects, the financial position of the City in conformity with
Generally Accepted Accounting Principles ("GAAP"). The independent auditors repot is presented as the first
component of the financial section of this report.
This letter of transmittal is designed to complement the Management Discussion and Analysis (MDItA) and
should be read in conjunction with it. The Management Discussion and Analysis can be found immediately
following the Independent Auditor Report.
Profile of the City of Lansing
Serving as Michigan's capital since 1848, the City of Lansing was incorporated in 1859 and operates under
provisions of Public Act 279 of 1909, as amended (the "Home Rule City Act"). The City incorporates 34.7
square miles and is located in the lower middle of Michigan's Lower Peninsula and operates under a strong
mayor form of government established by 1978 Charter revision.
3
Lansing is a mature core city with a population of 114,297, according to the 2010 census, and offers a full
range of services. During the fiscal year ended June 30, 2014, the City operated police headquarters and a
precinct with over 190 sworn police officers; six fire stations with a fire protection force of over 170; over
350 miles of sanitary sewers, 230 miles of storm sewers, and 180 miles of combined sewers; over 400 miles of
roads; 113 parks; a District Court; and support for human services and cultural events. The City's main
sources of revenue are property taxes, income taxes, State revenue sharing, Federal entitlement grants, and
charges for services, including utility billings.
Reporting Entity
The financial reporting entity (the City) includes all of the funds and of the primary government (i.e., the
City as legally defined), as well as its blended component units. Blended component units, although legally
separate entities, are, in substance, part of the primary government's operations and are included as part of
the primary government. The Lansing Building Authority is a blended component unit. Discretely presented
component units are reported in a separate column in the combined financial statements to emphasize that
they are legally separate from the primary government and to differentiate their financial position, results of
operations and cash flows from those of the primary government. The Lansing Entertainment Et Public
Facilities Authority, Tax Increment Finance Authority, Brownfield Redevelopment Authority, and Smart Zone
are reported as a discretely presented component units.
Financial Management and Control
Management of the City of Lansing is responsible for establishing and maintaining internal controls designed
to ensure that the assets of the government are protected from loss, theft, or misuse and to assure that
adequate accounting data is compiled to allow for the accurate presentation of financial statements in
conformity with generally accepted accounting principles.
To provide a reasonable basis for making these presentations, management has established a comprehensive
system of internal controls designed to reasonably ensure that assets of the City are protected from loss,
theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of
these financial statements in conformity with generally accepted accounting principles. Such controls
include appropriate policies and procedures, ongoing risk assessment, and monitoring and review processes
which are communicated throughout City operations. Because the cost of internal controls generally should
not outweigh their benefits, the City's framework of internal controls has been designed to provide
reasonable, rather than absolute, assurance that these objectives are met.
Because the City is a recipient of federal grant dollars, the independent audit of the financial statements of
the City of Lansing was part of a broader, federally-mandated "single audit" in conformity with the
provisions of the Single Audit Act of 1996 and the U.S. Office of Management and Budget Circular A-133,
Audits of States. Local Governments, and Non-profit Organizations. The standards governing the single audits
require the independent auditor to report not only on the fair presentation of the financial statements, but
also on the audited government's internal controls and compliance with legal requirements involving the
administration of the federal awards. These reports are available in the City's separately-issued Single Audit
Report.
Financial results and applicable policies affecting year-end results for the fiscal year-ended June 30, 2014
are discussed in the Management Discussion and Analysis (MDEtA), located immediately following the
Independent Auditor Report.
4
Budgeting Controls
The annual budget serves as the foundation for the City's financial planning, policy-making, and control. The
City Charter requires that the Mayor submit to the City Council a proposed budget by the fourth Monday in
March. Budgetary controls and limitations are noted in the Note Disclosure Section of the financial
statements.
The City also maintains an encumbrance accounting system, whereby purchase orders amounts are deducted
from the available budget, as one technique of accomplishing budgetary control. Encumbered amounts lapse
at year end and require Council approval to be carried forward to the ensuing fiscal year for amounts greater
than $5,000 or greater than eight months old.
Economic Condition and Outlook
Aggressive economic development activities have resulted in a number of economic projects that have
happened in 2014, resulting in more than 1,400 new direct jobs and equating to $528 billion in investments.
Several more are slated to break ground in 2015.
Though not in the City of Lansing, it is critical to note that Michigan State University (MSU) is on the
border of Lansing. MSU recently broke ground on the $550 million Facility for Rare Isotope Beams (particle
acceleration), one of the world's most high tech machines. It has already attracted to the city and region
200 of the world's top nuclear physics minds, and promises up to a 1000. MSU is ranked as the #1 nuclear
physics program in the country, one spot ahead of M.I.T., according to US News and World Report.
Niowave, a spin-off of MSU's accelerator work, is an example as to how MSU financially benefits the City.
The City has two major General Motors (GM) plants. During 2013/2014, GM made several significant
announcements for its Lansing plants:
Construction of a 400,000 square foot, $40 million, 200 new job Logistics Center to be built as part of
their Grand River Lansing Car Assembly plant. Plant will be ready for 2015.
Construction of a new stamping plant, investment valued at $162 million and 65 additional jobs.
Re-location of the Camaro production from Canada to the City's Grand River Car Assembly plant. This
will move the plant from the current two to three round the clock, full shifts and more. 600 - 1000
new jobs. The two new facilities (Logistics, Stamping) and employees should be fully in operation in
July 1015.
The Outfield development, a $27.6 mixed development featuring four stories of apartments located in
the outfield of Lansing's Cooley Law School Stadium, as well as improvements to the stadium, was
announced. The projected will commence the summer of 2014 and is expected to be completed by
the spring of 2016.
Niowave announced a 50,000 square foot, $202 million medical isotope production facility in the City of
Lansing. 127 jobs and $60,000 average wage will be created. Construction is slated to begin in the fall of
2014. This $3 billion cutting edge, pharmaceutical industry is produced primarily in Europe and Canada,
thus this facility is one of America's first. In addition to this, Niowave has completed its Prototype
Development/Research and Development building, adding 25 jobs at average salary of $60,000 with over
$10 million in machinery and equipment.
Jackson National Life, a Fortune 500 company and the nation's #1 individual annuities company, has
announced that they will double the size of their national headquarters in the City of Lansing, adding $114
million in new structure as well as adding 1000 new, very high paying, white collar jobs. Construction
should begin in the spring of 2014. Average salary for these 1000 new jobs will be $76,000 - all within the
City.
5
The downtown Knapp's department store, a $36 million rehabilitation project that will create over 100
jobs as well as fully redeveloping an entire city block. This building and block have been abandoned and
unused for several decades. It will also house the City's new Fashion Incubator, called the Runway, which
is attracting interest from over 36 tenants across Michigan. The newly-renovated Knapp's building is
poised to open in the fall of 2014.
In partnership with the City, the Sault Ste. Marie Tribe of Chippewa Indians announced plans for a 125,000
square-foot Kewadin tribal casino to be located next to the City's convention center. The casino is
planned to have 3,000 slot machines and 48 gambling tables and is projected to generate 1,500 jobs.
Revenue sharing from the operations of the casino are planned to fund four-year college scholarships for
Lansing School District graduates, modeled after the Kalamazoo Promise. The development has met some
legal challenges, but is progressing.
The Market Place project's steel is now constructed. This $10 million market rate, mixed use/residential
building is the City's first on its downtown riverfront. It will bring 80 units on line and is Phase I of two
more phases to be completed in the next five years. It will open in the late fall 2014.
The MidTown market rate, mixed use residential building's foundation is in place and will be completed
by early 2015. Located on Michigan Avenue, at the border of Lansing, East Lansing and Michigan State
University, it is targeting the ever-growing Chinese population of Michigan State University, with nearly
100 units as well as a PNC bank branch on the first floor.
The "Red Cedar Renaissance" mixed use project was announced in 2013. This signature project was put
together by one of North America's top developers, Continental Groups. The $200 million, 1,000-job-and-
resident project will develop the former City-owned Red Cedar Golf Course and act as a catalyst for the
entire Michigan Avenue corridor, which connects, Lansing, East Lansing, the Capitol building of Michigan
and Michigan State University.
The publicly-owned utility Lansing Board of Water and Light completed and opened its $180 million co-
generation natural gas plant in Lansing's REO Town. It also moved its corporate headquarters and 180
employees to this new site, sparking a whole revitalization effort within the REO Town area of Lansing.
The plant recently received recognition by the Pew Institute as one of the "cleanest and most efficient"
energy facilities in the nation and "Best Project of the Year" by Engineering News-Record Midwest
magazine.
The Sabori project is rehabilitating the former Heeb Building property and building a new $3 million
mixed use development in Lansing's Old Town.
The High Grade project will demolish a decades-old blighted building and silos in the City and construct a
new, efficient $2 million plant.
Lansing is an environment of high-growth and a good return on investment. Lansing is poised to benefit from
the new generation of young people, entrepreneurs and new economy businesses who are now demanding an
urban environment for living and working. Its economy is diverse; its work force creative.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in
Financial Reporting to the City for its Comprehensive Annual Financial Report for the fiscal year ended June
30, 2013. This was the 36th consecutive year that the City has received this prestigious award. In order to be
awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized
comprehensive annual financial report. This report satisfied both generally accepted accounting principles
and applicable legal requirements.
The Certificate of Achievement is valid for a period of one year only. We believe that our current
Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
6
Preparation of this comprehensive annual financial report was made possible by the dedicated service of the
entire staff of the Finance Department, as well as support by other departments. All those who contributed
to this document, especially Accounting Manager Randy Endsley, have our sincere appreciation for their
contributions made in the preparation of this report and in the financial management of the City. The 36th
consecutive GFOA award, recognizing their efforts, is well deserved indeed.
Sincerely,
Virg Bernero
Mayor
Angela Bennett
Finance Director
7
CITY OF LANSING, MICHIGAN
Table of Organization
Citizens of Lansing
City Clerk City Council Mayor 54-A District Court
Inlcmal City AFFumcy'R (AT—or o1T a
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sn�aia r•.rr�w
Poiicc Irirc Planning& 13conomic Public Parks R. 11-nan Rclnii—
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r;w:v�lopmern. Sar�icrs
Patrol suppreaeion RN ing Gmrrornic 1).w.Corp. Road.'Kd—lkll forks Desg.4t g ams Gmn[Wrmng A.mt.
Crime It»•cxpyMinn P,—.tion 74ning I.EPF/� gcwerxrl'reatn+enl Recrcatinn Progamx 1l�mnn k•.[:rw.tx
cammw ily Policing Code con ph.— 11vua &N�ighbo hiw uo enl�I a xirig,1-. 1 rBAi Z—yling Commm,ily Cenl�R P ira lmamal In..
Dctrn i— Bmergmcy 1.tgml Buildirg Safciy TIFA GroundshWnlermnce Cemeteries
Perking Rnfnrcemcnl Parking Sy.9lem Rnei—nng Cmlf
Propeny Management
rk 1s—rar.
Inforntmion Teehnoiogy Finance Human Rox—w
Trc ury�Irrmme Tax Recruirmcnl
Assexsing Tra nine
AC mingS.dgal ltelaliurrx
Re6-1 Sen'ices P y-11;Bener"
CITY OF LANSING, MICHIGAN
GFOA Certificate of Achievement
G
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Lansing
Michigan
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
,June 30,2013
Executive Director/CFO
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10
FINANCIAL SECTION
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12
�a Fie h m a n n Rebmann Robson
2330 East Paris Ave.SE
Grand Rapids,MI 49546
Ph: 616.975.4100
Fx: 616.975.4400
rehmann.com
INDEPENDENT AUDITORS' REPORT
December 19, 2014
Honorable Mayor and
Members of the City Council
City of Lansing, Michigan
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of the City of Lansing, Michigan (the "City"), as of and for the
year ended June 30, 2014, and the related notes to the financial statements, which collectively
comprise the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Independent Auditors'Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors' judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
13
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information
of the City of Lansing, Michigan, as of June 30, 2014, and the respective changes in financial position
and, where applicable, cash flows thereof and the budgetary comparison for the General Fund for the
year then ended in conformity with accounting principles generally accepted in the United States of
America.
Implementation of GASR Statements No. 65 and 67
As disclosed in Note 19 to the financial statements, the City implemented the provisions of GASB
Statement No. 65, Items Previously Reported as Assets and Liabilities (GASB 65), in the current year.
Implementation of GASB 65 revised classification of certain financial statement elements and
eliminated the presentation of bond issuance costs as an asset. As a result of this change, beginning
net position of governmental activities, business-type activities and discretely presented component
units decreased by $160,441, $924,785 and $143,468, respectively.
In addition, the City implemented the provisions of GASB Statement No. 67, Financial Reporting for
Pension Plans in the current year. While there was no effect on the amounts reported in the financial
statements themselves, there were substantial changes to the disclosures found in Note 16 to the
financial statements, including the calculation of the City's net pension liability, which will be required
to be recorded by the City in its next fiscal year. Our opinion is not modified with respect to these
matters.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management's Discussion and Analysis and the schedules for the pension and other postemployment
benefit plans, as listed in the table of contents, be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of America,
which consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The combining and individual fund financial
statements and schedules are presented for purposes of additional analysis and are not a required part
of the basic financial statements.
14
The combining and individual fund financial statements and schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the combining and individual fund financial statements and
schedules are fairly stated, in all material respects, in relation to the basic financial statements as a
whole.
The introductory section and statistical tables have not been subjected to the auditing procedures
applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or
provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued, under separate cover, our
report dated December 19, 2014, on our consideration of the City of Lansing, Michigan's internal
control over financial reporting and our tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on the internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the City's internal control over financial reporting and compliance.
,, .. L Lc
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MANAGEMENT'S DISCUSSION AND ANALYSIS
17
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
The management of the City of Lansing, Michigan ("the City") provides this narrative overview and analysis of the
financial activities of the City for the fiscal year ended June 30, 2014 for the benefit of the readers of these financial
statements. This management's discussion and analysis ("MD&A") is intended to assist the reader in focusing on
significant financial issues and provide an overview of the City's financial activity. The City encourages the readers
to consider the following information here in conjunction with the financial statements taken as a whole, which
follow this section.
Financial Highlights
Total government-wide assets and deferred outflows of resources of the City exceeded its liabilities at the close
of the fiscal year by $378.9 million (reported as net position), a decrease of $4.3 million from fiscal year
2012/2013.
As of the close of the 2013/2014 fiscal year, the City's governmental funds reported combined ending fund
balances of $22.8 million, a $3.6 million increase from fiscal year 2012/2013. Of the $22.8 million fiscal year
2013/2014 combined ending fund balance, $9.6 million is legally restricted and/or unavailable to spend (i.e.
amounts tied up in inventories), and $6.7 million is committed for designated projects, leaving $6.5 million
unassigned.
At the end of the fiscal year, unassigned fund balance for the General Fund, (including the amount internally
identified as a Budget Stabilization Fund), was $7.1 million, an increase of $1.4 million from FY 2012/13. Please
see the "General Fund and Budgetary Highlights" section of this Management Discussion and Analysis for further
detail.
The business-type activities reported net position at year-end of$261.1 million, an increase of$5.4 million during
the year.
The City's total bonded and loaned debt was $235.8 million at June 30, 2014, a decrease of $12.1 million (or
4.9%), which represents the net difference between new issuances and payments. More detailed information
regarding these activities and funds can be found in footnote 9, Long-Term Debt of the Notes to the Financial
Statements section of the CAFR.
Overview of the Financial Statements
This MDEtA is an introduction to the City's basic financial statements, which comprise three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This
report also contains other required supplementary information in addition to the basic financial statements.
Government-Wide Financial Statements. These statements include all non-fiduciary assets and liabilities but
exclude assets and liabilities related to pensions. The Statement of Net Position and the Statement of Activities are
two financial statements that report information about the City, as a whole, and about its activities, which provide
measurements of long term trends that should help answer this question: Is the City, as a whole, better off or worse
off as a result of this year's activities? Unlike the governmental funds, the current year's revenues and expenses are
taken into account regardless of when cash is received or paid, known as "full accrual accounting".
The Statement of Net Position presents all of the City's assets, deferred outflows of resources, liabilities and deferred
inflows of resources with the difference between the these categories reported as "net position". Over time,
increases and decreases in net position are an indicator of whether the City's long term financial position is improving
or deteriorating.
The Statement of Activities presents information showing how the City's net position changed during the most recent
fiscal year. All changes in net position are reported as soon as the underlying events giving rise to the change occur,
regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in these statements for
some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused
vacation leave).
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CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
The Statement of Net Position and the Statement of Activities report three activities, as follows:
Governmental Activities. Most of the City's basic services are reported under this category. Property taxes,
income taxes, and intergovernmental revenues generally fund these services. The Council (legislative branch),
the District Court (judicial branch), and general operations of the executive branch departments, such as police,
fire, parks, public works, and staff departments fall within the governmental activities.
Business-type Activities. The City charges fees to customers to help cover all or most of the costs of certain
services it provides. Sewage collection and treatment and commercial area parking are examples of business-type
activities.
Discretely Presented Component Units. Component units are legally separate organizations for which the elected
officials of the primary government are financially accountable. The City has four such discretely presented units;
the Lansing Entertainment and Public Facilities Authority, the Tax Increment Finance Authority, the Brownfield
Redevelopment Authority, and the SmartZone.
These financial statements include two schedules that reconcile the amounts reported on the governmental fund
financial statements (modified accrual accounting) with governmental activities (full accrual accounting) on the
appropriate government-wide statements. The following summarizes the impact of transitioning from modified
accrual to full accrual accounting:
Capital assets used in governmental activities are not reported on governmental fund statements.
Certain revenues that are earned, but not available for use within the reporting period, are reported as revenues
for governmental activities, but are reported as deferred inflows of resources on the governmental fund
statements.
Other long-term assets that are not available to pay for current period expenditures are deferred in
governmental fund statements, but not deferred on the government-wide statements.
Internal service funds are reported as governmental activities, but reported as proprietary funds in the fund
financial statements.
Bond discounts and premiums in the issuance of long term debt, are reported as expenditures in governmental
fund statements, but are capitalized and amortized in the government-wide statements.
Unless due and payable, long-term liabilities, such as capital lease obligations, compensated absences, litigation,
and others only appear as liabilities in the government-wide statements.
Capital outlay spending in excess of capitalization thresholds are recorded as capital assets on the government-
wide statements, but are reported as expenditures on the governmental fund statements.
Bond and note proceeds result in liabilities on the government-wide statements, but are recorded as other
financing sources on the governmental fund statements.
Certain other outflows, such as debt service principal payments, represent decreases in liabilities on the
government-wide statements, but are reported as expenditures on the governmental fund statements.
The Notes to the Basic Financial Statements provide additional information that is essential to a full understanding of
the data provided in the government-wide and fund financial statements.
19
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Fund Financial Statements. The City's Major Funds are identified as its General Fund, Sewage Disposal Fund, and
it's Municipal Parking System Fund. Data for all other funds, termed "nonmajor funds", are combined into a single,
aggregated presentation. A fund is a fiscal and accounting entity with a self-balancing set of accounts that the City
uses to keep track of specific sources of funding and spending for a particular purpose.
Governmental funds. Most of the City's basic services are reported in the governmental funds, which focus on
how money flows into and out of those funds and the balances left at year-end that are available for future
spending. The governmental fund financial statements provide a detailed short-term view of the City's general
government operations and the basic services it provides. Governmental fund information helps determine
whether there are greater or fewer financial resources that can be spent in the near future to finance the City's
programs. These funds are reported using modified accrual accounting, which measures cash and all other
financial assets that can readily be converted to cash. Governmental funds include the General Fund and special
revenue, capital project, debt service, and permanent funds.
Proprietary funds. When the City charges customers for the services it provides, whether to outside customers or
to other agencies within the City, these services are generally reported in proprietary funds. Proprietary funds
(enterprise and internal service) utilize full accrual accounting; the same method used by private sector
businesses. Enterprise funds report activities that provide supplies and services to the general public. Examples
are the Sewage Disposal Fund and the Municipal Parking Fund. Internal service funds are reported as
governmental activities on the government-wide statements.
Fiduciary Funds. The City acts as a trustee or fiduciary, for its employee pension plans. It is also responsible for
other assets that, because of a trust arrangement, can be used only for the trust beneficiaries. The City's
fiduciary activities are reported in separate Statements of Fiduciary Net Position and Changes in Fiduciary Net
Position. These funds, which include pension and other employee benefit funds, are reported using full accrual
accounting. The government-wide statements exclude fiduciary fund activities and balances because these assets
are restricted in purpose and do not represent spendable assets of the City to finance its operations.
Additional Required Supplementary Information
Following the basic financial statements is additional Required Supplementary Information that further explains and
supports the information in the financial statements. The Required Supplementary Information includes required
pension and other postemployment benefit supplementary information.
Other Supplementary Information
Other supplementary information includes combining financial statements for nonmajor governmental, proprietary,
and fiduciary funds. These funds are added together, by fund type, and presented in single columns in the basic
financial statements, but are not reported individually, as with major funds, on the governmental fund financial
statements.
20
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Government-Wide Financial Analysis
The City's combined net position decreased $4.3 million over the course of this fiscal year's operations to a total of
$378.9 million. Net position of governmental activities decreased $9.7 million or 7.6%, and business-type activities
increased $5.4 million or 2.1%. Explanations for those changes are described below under the Governmental
Activities and Business-Type Activities sections of this Management Discussion and Analysis.
Net Position
Governmental Activities Business-type Activities Total
2014 2013 2014 2013 2014 2013
Current and other assets $ 47,595,049 $ 45,743,473 $ 71,988,749 $ 67,785,783 $119,583,798 $113,529,256
Capital assets, net 187,934,084 192,940,938 389,610,713 397,911,962 577,544,797 590,852,900
Total assets 235,529,133 238,684,411 461,599,462 465,697,745 697,128,595 704,382,156
Deferred outflows of
resources 201,592 235,534 3,163,496 2,407,670 3,365,088 2,643,204
Long-term liabilities 53,568,260 56,330,630 201,061,383 210,324,829 254,629,643 266,655,459
Other liabilities 64,397,873 55,132,372 2,605,585 2,077,593 67,003,458 57,209,965
Total liabilities 117,966,133 111,463,002 203,666,968 212,402,422 321,633,101 323,865,424
Net position
Net investment in
capital assets 150,976,010 154,372,604 214,458,841 212,682,278 365,434,851 367,054,882
Restricted 13,133,137 12,552,011 8,746,096 11,077,134 21,879,233 23,629,145
Unrestricted (46,344,555) (39,467,672) 37,891,053 31,943,581 (8,453,502) (7,524,091)
Total net position $117,764,592 $127,456,943 $261,095,990 $255,702,993 $378,860,582 $383,159,936
The largest component (96.5%) of the City's net position reflects its net investment in capital assets (e.g. land,
buildings, equipment, infrastructure, and others). Restricted net position is the next largest component, which
represents amounts subject to external restrictions such as bond covenants, City Charter, State legislation or
Constitutional provision. The remaining portion, unrestricted net position are resources that may be used at the City's
discretion, but often have limitations based on policy action.
21
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
The following condensed financial information was derived from the government-wide Statement of Activities and
reflects how the City's net position changed during the fiscal year:
Change in Net Position
Governmental Activities Business-type Activities Total
2014 2013 2014 2013 2014 2013
Program revenues
Charges for services $ 11,939,026 $ 12,530,371 $ 45,042,043 $ 41,346,995 $ 56,981,069 $ 53,877,366
Operating grants 28,234,803 29,322,435 2,574,949 1,193,571 30,809,752 30,516,006
Capital grants 3,365,682 3,124,288 - - 3,365,682 3,124,288
General revenues
Taxes 69,530,461 68,519,592 69,530,461 68,519,592
State shared revenues 13,630,527 13,201,648 13,630,527 13,201,648
Unrestricted grants
and contributions 22,047,383 18,224,070 22,047,383 18,224,070
Unrestricted investment
earnings 36,836 58,588 246,616 356,467 283,452 415,055
Gain (loss)on sale of
capital assets - - 2,600 - 2,600 -
Total revenues 148,784,718 144,980,992 47,866,208 42,897,033 196,650,926 187,878,025
Expenses
General government 24,771,054 27,438,065 - - 24,771,054 27,438,065
Public safety 78,142,897 77,133,469 78,142,897 77,133,469
Public works 37,243,516 29,984,955 37,243,516 29,984,955
Recreation and culture 8,670,918 7,713,098 8,670,918 7,713,098
Community development 7,602,229 16,939,572 7,602,229 16,939,572
Interest on long-term debt 1,340,818 1,475,051 1,340,818 1,475,051
Sewage disposal system - - 28,682,809 26,298,964 28,682,809 26,298,964
Municipal parking system 7,851,702 8,108,373 7,851,702 8,108,373
Cemetery 722,270 633,050 722,270 633,050
Golf 935,671 892,117 935,671 892,117
Garbage and rubbish - 1,557,708
collection 1,722,843 1,557,708 1,722,843 3,650,292
Recycling 3,263,553 3,650,292 3,263,553 3,650,292
Total expenses 157,771,432 160,684,210 43,178,848 41,140,504 200,950,280 201,824,714
Change in net position,
before transfers (8,986,714) (15,703,218) 4,687,360 1,756,529 (4,299,354) (13,946,689)
Transfers (705,637) (583,117) 705,637 583,117
Change in net position (9,692,351) (16,286,335) 5,392,997 2,339,646 (4,299,354) (13,946,689)
Net position:
Beginning of year,
as restated 127,456,943 143,743,278 255,702,993 253,363,347 383,159,936 397,106,625
End of year $117,764,592 $127,456,943 $261,095,990 $255,702,993 $378,860,582 $383,159,936
22
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Governmental Activities. The following chart depicts revenues of the governmental activities for the fiscal year:
Revenues - Governmental Activities
Fiscal Year Ending June 30, 2014
Property Tax and Special
Assessments Income Tax
25.6% 21.1
Gain on Sale of Capital
Assets ---_
0.0%
Unrestricted Investment 1
Earnings Charges for Services
0.0% 8.0%
Unrestricted Grants and
Contributions Operating Grants and
14.8% Contributions(restricted)
Capital Grants and 19.0%
State Shared Revenue Contributions
9.2% 2.3%
In total, Governmental Activity revenue increased $3.8 million from FY 2012/2013 to FY 2013/2014, with trends of the
major revenue categories as follows:
Property taxes and special assessments comprised the largest portion of Governmental Activity revenue at 25.6%, or
$38.1 million, a $589,289, 1.5% decrease from fiscal year 2012/2013. The decrease was due to reductions in taxable
values attributable to the recession and housing market.
Income taxes comprised 21.1%, or $31.5 million, of Governmental Activity revenue, the full amount of which is
revenue to the General Fund. This represents a $1.6 million, 5.4%, increase from fiscal year 2012/2013. Local
income tax rates are prescribed by State law, and limited in Lansing's case to 1% of resident income and 0.5% of the
income of persons working in the City, but living outside of its corporate boundaries.
Restricted Operating and Capital Grants and Contributions made up $31.6 million, or 21.2% of Governmental Activity
revenue for fiscal year 2013/2014, a $846,144 or 2.7% decrease from fiscal year 2012/2013. In this category, $14.2
million are recurring revenues from: State Gas Et Weight tax revenues restricted for streets; Community Development,
HOME, and Emergency Shelter entitlement grants; and drug forfeiture funds restricted for drug enforcement efforts.
The remaining $17.4 million is attributable to non-entitlement grants. The decrease from FY 2012/2013 is the result
of a reduction in non-entitlement grants with the conclusion of much of the federal ARRA grants.
Unrestricted Grants and Contributions account comprised 24.0%, or$35.7 million, of revenues, a $4.3 million or 11.9%
increase from fiscal year 2012/2013. A little more than one-third of this category, $13.6 million, is attributed to
State revenue sharing, an amount distributed to municipalities by the State of Michigan by formula allocation of
portions of the State sales tax. Equity payments from the independently-managed-and-operated Board of Water and
Light account for $20.6 million of the category, with remaining $1.5 million coming from payments from the State of
Michigan for a payment in lieu of tax for its fire protection for its properties, bad driver revenues, and reimbursement
of liquor license enforcement costs. A $4.5 million increase in the equity payment from the Board of Water and Light
accounted for the increase in unrestricted grants and contributions from FY 2012/2013 to FY 2013/2014.
Charges for Services are program-specific revenues generated for services provided. Governmental activity charges
for services decreased $591,345 from FY 2012/2013 to FY 2013/2014. The majority of the decrease is attributable to
reimbursements received in FY 2012/2013 for road work due to work on underlying utilities.
23
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
The following chart depicts expenses of the governmental activities for the fiscal year:
Expenses - Governmental Activities
Fiscal Year Ending June 30, 2014
Community Interest on Long-term
Development Debt
4.8% 0.8%
General Government
Recreation and Culture (administrative)
5.5% 15.7%
Public Works — Public Safety
23.6% 49.5%
Total expenses for Governmental Activities decreased $2.9 million from FY 2012/2013 to FY 2013/2014. The
reduction is largely attributable to a reduction in non-entitlement grants and corresponding grant expenditures,
which decreased $9.0 million from fiscal year 2012/2013. That $9.0 million decrease was offset by a $7.3 million
increase from FY 2012/2013 as a result of increased infrastructure and capital expenditures, and a $1.2 million
reduction in various other governmental activity expenditures. Departmental reorganizations accounted for
differences in expenses from FY 2013/2013 to FY 2013/2014, with departmental divisions being moved from
Community development to Public Safety, and Information Technology with the General Government category being
moved to an internal service fund (therefore, funded by various funds).
Business-type Activities. Net position of the business-type activities increased by $5.4 million during the fiscal year
to $261.1 million. The increase was mainly attributable to a $2.2 million increase in parking service from a loan
release and a $3.0 increase in sewer system operations during the fiscal year which are necessary to fund the debt
associated with the Combined Sewer Overflow (CSO) program in future years.
Financial Analysis of the City's Funds
As the City completed the fiscal year, its governmental funds reported combined ending fund balances of $22.8
million. Of this, $9.6 million is legally restricted and/or unavailable to spend (i.e. amounts tied up in inventories),
and $6.7 million is committed for designated projects, leaving $6.5 million unassigned.
24
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
General Fund Budgetary Highlights
The FY 2013/2014 budget was adopted as a balanced budget, based on projected revenues, without any use of
reserves. The City budgeted a vacancy factor in its General Fund to account for anticipated positions that would
become vacant during the course of the year. Because vacancies that will occur within each department can not be
projected, the vacancy factor is budgeted as a single line item of the General Fund and allocated to various
departments through a budget amendment during the year. During the course of the fiscal year, the budget was
amended to allocate the vacancy factor, and to recognize projected increases in revenues, as well as additional
expenditures required as the result of a severe winter, including a major ice storm that required debris collection
across the City.
General Fund reserves, combined with the Budget Stabilization Fund (combined for financial statement purposes)
increased $0.5 million from FY 2012/2013 from $8.7 million to $9.2 million. However, $906,216 of expenditures were
from restricted (committed) reserves. As a result, unassigned fund balance increased $1.4 million, or 25.2% from
fiscal year 2012/2013. This $1.4 million increase was attributable to General Fund expenditures and operating
transfers ending the year less than budgeted, due largely to position vacancies.
The FY 2014/2015 budget, adopted at levels commensurate with projected decreases in property values and other
revenue levels experienced in FY 2013/2014, is budgeted to increase unassigned reserves by $500,000.
Sewage Disposal Fund
Net position increased $3.0 million to $237.9 million in FY 2014. Unrestricted net position increased $3.1 million,
from $23.4 million to $26.5 million. These increases were attributable to increases in sewer rates during the fiscal
year which are necessary to fund the debt associated with the Combined Sewer Overflow (CSO) program in future
years.
Municipal Parking Fund
The Municipal Parking Fund net position increased $2.2 million, from $17.1 million to $19.3 million. Unrestricted net
position increased $2.6 million, from $7.4 million to $10.0 million. The increase was largely due to a $1.7 million loan
release.
25
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Capital Assets. At the end of the fiscal year 2014, the City had invested $577.5 million, net of accumulated
depreciation, in a broad range of capital assets (see the table below). Additional information regarding the City's
capital assets can be found in Footnote 6 of the of the Notes to the Financial Statements section of the CAFR.
Capital Assets (Net of Depreciation)
Governmental Activities Business-type Activities Total
2014 2013 2014 2013 2014 2013
Land $ 25,725,672 $ 25,690,735 $ 13,483,909 $ 13,483,909 $ 39,209,581 $ 39,174,644
Land improvements 9,140,079 8,565,261 11,907,987 12,179,183 21,048,066 20,744,444
Buildings and improvements 53,049,485 51,236,128 101,100,442 105,232,796 154,149,927 156,468,924
Equipment 5,708,965 5,460,316 1,955,425 286,281 7,664,390 5,746,597
Infrastructure 92,028,470 96,698,897 253,517,073 258,219,955 345,545,543 354,918,852
Construction in progress 2,281,413 5,289,601 7,645,877 8,509,838 9,927,290 13,799,439
Total capital assets, net $187,934,084 $192,940,938 $389,610,713 $397,911,962 $577,544,797 $590,852,900
Debt Administration. The City, along with the Lansing Building Authority (LBA), a blended component unit of the
City, is empowered by law to authorize, issue, and sell debt obligations. Limited tax and unlimited tax general
obligation bonds are backed by the full faith and credit of the City. The City also issues revenue-dedicated bonded
debt, whose payment for principal and interest comes solely out of funds that receive legally-restricted revenues.
The Sewage Disposal fund has the City's only dedicated revenue bonds currently outstanding. LBA's bonds financed
the construction of parking, golf course, and firing range improvements. Revenues derived from user fees from
persons using parking and golf facilities fund the debt service requirements for related improvements, but they are
also backed by a limited tax pledge.
26
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
Outstanding Debt
2014 2013
Governmental activities
General obligation bonds $ 27,145,000 $ 29,932,000
Installment purchase contracts 3,100,563 2,807,838
Loans 7,062,234 6,246,743
Compensated absences 10,153,254 10,138,900
Workers compensation 5,967,593 6,986,062
Tax settlement 104,322 156,483
Deferred amounts:
For issuance discounts (86,654) (93,487)
For issuance premiums 121,948 156,091
Total governmental activities 53,568,260 56,330,630
Business-type activities
General obligation bonds 175,033,286 182,127,578
Revenue bonds 21,765,000 25,030,000
Installment purchase
agreements 1,668,081 -
Loans - 1,702,664
Compensated absences 866,003 733,908
Deferred amounts:
For issuance discounts (782,377) (2,020,876)
For issuance premiums 2,511,390 2,751,555
Total business-type activities 201,061,383 210,324,829
Total outstanding debt $254,629,643 $266,655,459
The City procured a $986,300 loan from the State of Michigan for street and bridge repairs and entered into a $1.5
million installment purchase agreement for trucks, both of which are categorized as Governmental activity debt. The
City also issued $3.4 million in State revolving loan fund debt for the City's Wet Weather (formerly Combined Sewer
Overflow/Sanitary Sewer Overflow) environmental program in the sewer (proprietary) fund, as well as a $1.7 million
installment purchase contract for recycling carts, both of which are considered Business-type activity debt. Under
special legislation from the State of Michigan, a restructuring of bonds associated with the parking system and tax
increment financing district occurred, resulting in a net increase of $2.2 million in general obligation Business-type
activity debt. During the year, a $1.7 million loan was released, which was also categorized as Business-type activity
debt. Reductions in the other categories listed above are due debt payments made during the course of the fiscal
year. More detailed information regarding these activities and funds can be found in Footnote 9 of the of the Notes
to the Financial Statements section of the CAFR.
Economic Condition and Outlook
Emerging from the Great Recession, Lansing's property values, upon which General Fund property taxes are based,
have stabilized, and income taxes have strengthened. Indeed, the 2013/2014 fiscal year resulted in a $1.4 million
addition to General Fund unassigned reserves. Lansing's financial picture as a whole has stabilized, but significant
challenges remain. Revenue shortfalls during the recession resulted in significant drawdown on its General Fund
reserves. While the fiscal year 2013/2014 results improved reserve levels, Lansing's reserve levels are still low. Going
forward, State limitations on property tax growth will continue to constrain resources, and pension, healthcare, and
infrastructure funding needs continue to significant budgetary challenges.
27
CITY OF LANSING, MICHIGAN
Management's Discussion and Analysis
The City continues strategies implemented by Mayor Virg Bernero during the Recession to address these challenges:
maximizing revenues; reducing expenses; improving operational and technological efficiencies; consolidating like
functions; pursuing regional collaboration and partnerships for services; working with the City's workforce and labor
unions to contain the rising cost of healthcare, pension, and other compensation costs, both now and into the future;
and continuing work with the Financial Health Team appointed by the Mayor in 2012 to identify both short-term and
long-term strategies to strengthen Lansing, as well as the metropolitan Lansing region.
Strengthening the City's economic base and building back up General Fund reserves to pre-Recession levels are top
priorities. Accordingly, in addition to fiscal year 2013/2014 results, the City has implemented a new General Fund
balance policy in order to build back reserves starting with fiscal year 2014/2015 budget, and conservative revenue
projections are anticipated to further the addition to reserves by the end of the fiscal year. In terms of economic
development, even during the Recession, which included a historic credit crisis in the private sector, the City has
seen significant economic development announcements (see Economic Condition and Outlook in the Transmittal
Letter) that have received national recognition; those efforts have had continued success.
Requests for Information
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general
overview of the City's finances and to demonstrate the City's accountability for the money it receives. Copies of this
financial report, as well as other financial reports, are available on the City's website, www.lansingmi.gov. If you
have any questions about this report or need additional financial information, please feel free to contact the Finance
Department at (517)483-4500.
28
BASIC FINANCIAL STATEMENTS
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30
GOVERNMENT-WIDE FINANCIAL STATEMENTS
31
CITY OF LANSING, MICHIGAN
Statement of Net Position
June 30, 2014
Primary Government
Governmental Business-type Component
Activities Activities Totals Units
Assets
Cash and investments $ 23,744,085 $ 18,032,987 $ 41,777,072 $ 2,303,169
Receivables, net 37,530,324 28,256,345 65,786,669 963,394
Internal balances (15,615,251) 15,615,251 - -
Due from primary government - - - 2,206,788
Inventories, prepaids and other assets 1,935,891 434,187 2,370,078 129,681
Restricted assets:
Cash and investments - 9,649,979 9,649,979 1,736,241
Capital assets not being depreciated 28,007,085 21,129,786 49,136,871 -
Capital assets being depreciated, net 159,926,999 368,480,927 528,407,926 14,398
Total assets 235,529,133 461,599,462 697,128,595 7,353,671
Deferred outflows of resources
Deferred refunding loss 201,592 3,163,496 3,365,088 4,588,603
Liabilities
Accounts payable and
accrued liabilities 14,638,908 1,429,057 16,067,965 1,510,906
Accrued interest payable 179,819 1,068,981 1,248,800 15,607,525
Unearned revenue 562,468 107,547 670,015 493,788
Due to component units 2,206,788 - 2,206,788 -
Long-term liabilities:
Due within one year 5,751,001 14,326,328 20,077,329 241,079
Due in more than one year 47,817,259 186,735,055 234,552,314 29,369,737
Net pension obligation 246,093 - 246,093 -
Net other postemployment benefit obligation 46,563,797 - 46,563,797 -
Total liabilities 117,966,133 203,666,968 321,633,101 47,223,035
Net position
Net investment in capital assets 150,976,010 214,458,841 365,434,851 14,398
Restricted for:
Public safety 1,084,370 - 1,084,370 -
Public works 6,727,918 6,727,918
Community development 3,380,209 3,380,209
Federal and state programs 185,191 185,191
Donations 36,854 - 36,854
Debt service - 8,029,091 8,029,091
Capital projects - 717,005 717,005
Endowments (nonexpendable) 1,718,595 - 1,718,595
Unrestricted (deficit) (46,344,555) 37,891,053 (8,453,502) (35,295,159)
Total net position (deficit) $ 117,764,592 $ 261,095,990 $ 378,860,582 $ (35,280,761)
The accompanying notes are an integral part of the financial statements.
32
CITY OF LANSING, MICHIGAN
Statement of Activities
For the Year Ended June 30, 2014
Program Revenues
Operating Capital Net
Charges Grants and Grants and (Expense)
Functions/Programs Expenses for Services Contributions Contributions Revenues
Primary government
Governmental activities:
General government $ 24,771,054 $ 6,820,261 $ 2,382,985 $ $ (15,567,808)
Public safety 78,142,897 2,122,023 8,915,990 (67,104,884)
Public works 37,243,516 2,129,126 9,257,293 3,365,682 (22,491,415)
Recreation and culture 8,670,918 800,293 55,600 - (7,815,025)
Community development 71602,229 67,323 7,622,935 88,029
Interest on long-term debt 1,340,818 - - - (1,340,818)
Total governmental activities 157,771,432 11,939,026 28,234,803 3,365,682 (114,231,921)
Business-type activities:
Sewage disposal system 28,682,809 31,759,698 - - 37076,889
Municipal parking system 7,851,702 7,453,476 27574,949 27176,723
Cemetery 722,270 289,565 - (432,705)
Golf 935,671 366,567 (569,104)
Garbage and rubbish collection 1,722,843 1,664,201 (58,642)
Recycling 3,263,553 3,508,536 - 244,983
Total business-type activities 43,178,848 45,042,043 27574,949 - 47438,144
Total primary government $ 200,950,280 $ 56,981,069 $ 30,809,752 $ 3,365,682 $ (109,793,777)
Component units
Brownfield redevelopment $ 1,732,268 $ - $ 787,323 $ - $ (944,945)
Community development 3,765,599 - - (37765,599)
Recreation and culture 6,915,176 5,599,274 17208,780 (107,122)
Total component units $ 12,413,043 $ 5,599,274 $ 1,996,103 $ $ (4,817,666)
continued...
33
CITY OF LANSING, MICHIGAN
Statement of Activities
For the Year Ended June 30, 2014
Primary Government
Governmental Business-type Component
Activities Activities Totals Units
Changes in net position
Net (expense) revenues $(114,231,921) $ 4,438,144 $(109,793,777) $ (4,817,666)
General revenues:
Property taxes 38,079,548 - 38,079,548 3,994,832
Income taxes 31,450,913 31,450,913 -
Grants and contributions not
restricted to specific programs 35,677,910 35,677,910 -
Unrestricted investment earnings 36,836 246,616 283,452 6,398
Gain on sale of capital assets - 2,600 2,600 -
Transfers - internal activities (705,637) 705,637 - -
Total general revenues and transfers 104,539,570 954,853 105,494,423 4,001,230
Change in net position (9,692,351) 5,392,997 (4,299,354) (816,436)
Net position (deficit), beginning of year, as restated 127,456,943 255,702,993 383,159,936 (34,464,325)
Net position (deficit), end of year $ 117,764,592 $ 261,095,990 $ 378,860,582 $ (35,280,761)
concluded
The accompanying notes are an integral part of the financial statements.
34
FUND FINANCIAL STATEMENTS
35
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36
CITY OF LANSING, MICHIGAN
Governmental Fund Financial Statements
Major Funds
The General Fund is the general operating fund of the City. It is used to account for and report all
financial resources not accounted for and reported in another fund.
Nonmajor Funds
Nonmajor governmental funds are presented, by fund type, beginning on the pages listed below:
Special revenue funds, page 130.
Debt service funds, page 142.
Capital projects funds, page 146.
Permanent funds, page 152.
37
CITY OF LANSING, MICHIGAN
Balance Sheet
Governmental Funds
June 30, 2014
Nonmajor
Governmental
General Funds Totals
Assets
Cash and cash equivalents $ 318,312 $ 57,262 $ 375,574
Equity in pooled cash and investments 9,347,393 9,787,948 19,135,341
Accounts receivable, net 21,315,215 154,877 21,470,092
Taxes receivable 628,201 - 628,201
Special assessments receivable - 500,778 500,778
Loans receivable 1,432,342 1,432,342
Accrued interest receivable - 2,147,867 2,147,867
Due from other funds 6,390,868 4,055,000 10,445,868
Due from other governments 4,910,767 6,015,078 10,925,845
Inventories 49,601 833,380 882,981
Prepaids 30,169 - 30,169
Total assets $ 42,990,526 $ 24,984,532 $ 67,975,058
Liabilities
Accounts payable $ 3,421,929 $ 2,712,490 $ 6,134,419
Deposits payable - 47,028 47,028
Accrued payroll 1,935,015 32,981 1,967,996
Retainage payable 200,089 - 200,089
Due to other funds 20,613,895 3,780,000 24,393,895
Due to component units 2,206,788 - 2,206,788
Advance from other funds - 362,224 362,224
Due to other governments 2,916,501 333,749 3,250,250
Unearned revenue 227,071 335,397 562,468
Other 608,454 - 608,454
Total liabilities 32,129,742 7,603,869 39,733,611
Deferred inflows of resources
Unavailable revenue-fees 1,652,722 - 1,652,722
Unavailable revenue- loans and accrued interest receivable - 3,380,209 3,380,209
Unavailable revenue-special assessments - 444,596 444,596
Total deferred inflows of resources 1,652,722 3,824,805 5,477,527
Fund balances
Nonspendable 79,770 2,551,975 2,631,745
Restricted 36,854 6,902,928 6,939,782
Committed 2,038,608 4,623,112 6,661,720
Unassigned (deficit) 7,052,830 (522,157) 6,530,673
Total fund balances 9,208,062 13,555,858 22,763,920
Total liabilities, deferred inflows of
resources and fund balances $ 42,990,526 $ 24,984,532 $ 67,975,058
The accompanying notes are an integral part of the financial statements.
38
CITY OF LANSING, MICHIGAN
Reconciliation
Fund Balances of Governmental Funds
to Net Position of Governmental Activities
June 30, 2014
Fund balances-total governmental funds $ 22,763,920
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in
the funds.
Capital assets not being depreciated 28,007,085
Capital assets being depreciated, net 159,926,999
Capital assets accounted for in internal service funds, net (13,326,936)
Because the focus of governmental funds is on short-term financing, some assets will not be available to pay
for current expenditures. Those assets (i.e., receivables) are offset by deferred inflows of resources in the
governmental funds and, therefore, are not included in fund balance.
Deferred ambulance fees receivable 1,006,779
Deferred nuisance fees receivable 583,808
Deferred loans receivable 1,232,342
Deferred long-term interest receivable 2,147,867
Deferred long-term special assessments receivable 444,596
Deferred long-term taxes and tax settlement receivables 62,135
Internal service funds are used by management to charge the costs of certain equipment maintenance to
individual funds. The assets and liabilities of the internal service funds are included in governmental
activities in the statement of net position. 8,200,789
Long-term liabilities and related deferred outflows are not due and payable in the current period and
therefore are not reported in the funds.
Bonds, loans and leases payable (31,127,222)
Deferred loss on refunding 194,713
Accrued interest on bonds, loans and leases payable (134,197)
Net pension obligation (246,093)
Net other postemployment benefit obligation (46,563,797)
Compensated absences and other long-term liabilities (15,408,196)
Net position of governmental activities $ 117,764,592
The accompanying notes are an integral part of the financial statements.
39
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2014
Nonmajor
Governmental
General Funds Totals
Revenues
Taxes and special assessments $ 37,146,069 $ 1,005,093 $ 38,151,162
Income taxes 31,450,913 - 31,450,913
Licenses and permits 1,508,133 - 1,508,133
Intergovernmental 15,036,232 26,622,203 41,658,435
Charges for services 8,348,581 4,688,433 13,037,014
Fines and forfeits 2,315,597 422,795 2,738,392
Interest and rents 49,134 7,416 56,550
Contributions 20,715,882 10,000 20,725,882
Otherrevenues 196,380 457,126 653,506
Total revenues 116,766,921 33,213,066 149,979,987
Expenditures
Current expenditures:
General government 18,149,864 2,913,725 21,063,589
Public safety 66,701,402 5,366,896 72,068,298
Public works 10,095,380 3,361,393 13,456,773
Highways and streets - 10,496,880 10,496,880
Recreation and culture 7,741,209 716,235 8,457,444
Community development 3,646,035 3,646,035
Other functions 2,620,316 - 2,620,316
Debt service:
Principal 1,462,295 2,022,809 3,485,104
Interest 438,455 746,802 1,185,257
Capital outlay - 8,715,193 8,715,193
Total expenditures 107,208,921 37,985,968 145,194,889
Revenues over(under)expenditures 9,558,000 (4,772,902) 4,785,098
Other financing sources (uses)
Transfers in 385,000 10,137,162 10,522,162
Transfers out (9,503,151) (3,344,648) (12,847,799)
Proceeds on sale of capital assets 73,139 94,598 167,737
Issuance of long-term debt - 986,300 986,300
Total other financing sources (uses) (9,045,012) 7,873,412 (1,171,600)
Net change in fund balances 512,988 3,100,510 3,613,498
Fund balances, beginning of year 8,695,074 10,455,348 19,150,422
Fund balances, end of year $ 9,208,062 $ 13,555,858 $ 22,763,920
The accompanying notes are an integral part of the financial statements.
40
CITY OF LANSING, MICHIGAN
Reconciliation
Net Changes in Fund Balances of Governmental Funds
to Change in Net Position of Governmental Activities
For the Year Ended June 30, 2014
Net change in fund balances-total governmental funds $ 3,613,498
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost
of those assets is allocated over their estimated useful lives as depreciation expense.
Capital assets purchased/constructed 7,007,813
Depreciation expense (13,736,351)
Loss on sale of capital assets (1,235,003)
Proceeds on sale of capital assets (167,737)
Revenues in the statement of activities that do not provide current financial resources are not reported as
revenues in the funds, but rather are deferred to subsequent fiscal years.
Changein deferred ambulance fees receivable (1,153,346)
Changein deferred nuisance fees receivable (31,679)
Changein deferred loans receivable (1,927)
Changein deferred long-term interest receivable 69,250
Changein deferred special assessments receivable (97,774)
Changein deferred taxes and tax settlement receivables (26,001)
Internal service funds are used by management to charge the costs of certain equipment maintenance to
individual funds. The net increase (decrease) in the net position of the internal service funds is reported
with governmental activities.
Net operating loss from governmental activities in internal service funds (651,257)
Loss on sale of capital assets from governmental internal service funds 345,736
Interest expense from governmental internal service funds (186,980)
Transfers in from governmental internal service funds 1,620,000
Debt proceeds provide current financial resources to governmental funds in the period issued, but issuing
debt increases long-term Liabilities in the statement of net position. Repayment of debt principal is an
expenditure in the funds, but the repayment reduces long-term liabilities in the statement of net position.
Issuance of long-term debt (986,300)
Principal payments on long-term liabilities 3,485,104
Certain expenditures are reported in governmental funds that reduce long-term liabilities for purposes of the
statement of net position.
Change in estimated liability for workers'compensation 1,018,469
Some expenses reported in the statement of activates do not require the use of current financial resources
and therefore are not reported as expenditures in the funds.
Change in accrued interest payable on long-term liabilities 32,957
Amortization of issuance premiums and discounts, and deferred refunding losses (1,538)
Change in net other postemployment benefit obligation (8,755,530)
Change in net pension obligation (2,965)
Change in the accrual for compensated absences 97,049
Change in the accrual for tax settlement agreement 52,161
Change in net position of governmental activities $ (9,692,351)
The accompanying notes are an integral part of the financial statements.
41
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - General Fund
For the Year Ended June 30, 2014
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Revenues
Property taxes $ 37,524,500 $ 37,524,500 $ 37,146,069 $ (378,431)
Income taxes 29,130,000 30,355,000 31,450,913 1,095,913
Licenses and permits 1,564,700 1,553,100 1,508,133 (44,967)
Intergovernmental 14,568,300 14,568,300 15,036,232 467,932
Charges for services 9,001,000 9,402,600 8,348,581 (1,054,019)
Fines and forfeits 2,595,400 2,595,400 2,315,597 (279,803)
Interest and rents 60,000 60,000 49,134 (10,866)
Contributions 20,905,390 20,762,353 20,715,882 (46,471)
Otherrevenues - 132,100 196,380 64,280
Total revenues 115,349,290 116,953,353 116,766,921 (186,432)
Expenditures
General government:
Attorney's office 1,450,050 1,466,533 1,417,510 (49,023)
City clerk 878,850 932,067 906,432 (25,635)
Council 626,040 634,589 613,970 (20,619)
Courts 5,596,560 5,646,807 5,473,601 (173,206)
Internal audit 184,200 186,694 175,996 (10,698)
Finance 4,885,760 4,663,350 4,506,989 (156,361)
Library rental 155,000 155,000 154,737 (263)
LEPFA support 311,400 1,208,780 1,208,780 -
Hu man resources 1,610,340 1,623,843 1,567,489 (56,354)
Mayor 748,180 819,940 826,471 6,531
Office of community media 333,740 336,680 336,702 22
Planning / neighborhood development 841,360 854,984 961,187 106,203
Budgetary savings from attrition (600,000) - - -
Total general government 17,021,480 18,529,267 18,149,864 (379,403)
Public safety:
Police 35,359,530 35,484,905 34,995,936 (488,969)
Fire 33,181,260 32,741,881 31,705,466 (1,036,415)
Total public safety 68,540,790 68,226,786 66,701,402 (1,525,384)
Public works 9,437,430 9,801,661 10,095,380 293,719
Recreation and culture 7,042,520 7,135,872 7,741,209 605,337
continued...
42
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - General Fund
For the Year Ended June 30, 2014
Actual Over
Original Final (Under) Final
Budget Budget Actual Budget
Expenditures (concluded)
Other functions:
Human relations / community services $ 868,090 $ 878,162 $ 926,388 $ 48,226
Human services / community support 1,395,000 1,918,017 1,693,928 (224,089)
Total other functions 2,263,090 2,796,179 2,620,316 (175,863)
Debt service:
Principal 948,220 1,462,620 1,462,295 (325)
Interest 444,000 444,000 438,455 (5,545)
Total debt service 1,392,220 1,906,620 1,900,750 (5,870)
Total expenditures 105,697,530 108,396,385 107,208,921 (1,187,464)
Revenues over expenditures 9,651,760 8,556,968 9,558,000 1,001,032
Other financing sources (uses)
Transfers in 85,000 385,000 385,000 -
Transfers out (9,736,760) (9,439,986) (9,503,151) 63,165
Proceeds on sale of capital assets 8,000 73,139 65,139
Total other financing sources (uses) (9,651,760) (9,046,986) (9,045,012) 1,974
Net change in fund balance - (490,018) 512,988 1,003,006
Fund balance, beginning of year 8,695,074 8,695,074 8,695,074 -
Fund balance, end of year $ 8,695,074 $ 8,205,056 $ 9,208,062 $ 1,003,006
concluded
The accompanying notes are an integral part of the financial statements.
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44
CITY OF LANSING, MICHIGAN
Proprietary Fund Financial Statements
Major Funds
The Sewage Disposal System Fund accounts for the provision of sewage disposal services to the
residents of the City.
The Municipal Parking System Fund accounts for the operation of City-owned parking facilities.
Nonmajor Funds and Internal Service Funds
Nonmajor enterprise funds and internal service funds are presented, by fund type, beginning on the
pages listed below:
Nonmajor enterprise funds, page 156.
Internal service funds, page 162.
45
CITY OF LANSING, MICHIGAN
Statement of Net Position
Proprietary Funds
June 30, 2014
Governmental
Business-type Activities-Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Assets
Current assets:
Cash and cash equivalents $ - $ 672,573 $ 500 $ 673,073 $ 1,892,332
Equity in pooled cash and investments 10,513,603 5,024,198 1,822,113 17,359,914 2,972,619
Accounts receivable,net 5,056,709 430,646 55,876 5,543,231 425,199
Accrued interest receivable 52,596 74,268 - 126,864 -
Lease receivable,current 612,693 - 612,693
Loans receivable,current - 241,079 - 241,079 -
Inventories 346,009 - 88,178 434,187 472,528
Prepaids - - - - 550,213
Due from other funds 18,385,874 3,258,021 - 21,643,895 -
Total current assets 34,967,484 9,700,785 1,966,667 46,634,936 6,312,891
Noncurrent assets:
Restricted cash and cash equivalents 8,932,974 717,005 - 9,649,979 -
Advances to other funds - 362,224 362,224
Lease receivable, net of current portion 9,408,506 11,858,813 21,267,319
Loans receivable, net of current portion - 465,159 465,159 -
Capitalassets not being depreciated 8,066,625 12,558,920 504,241 21,129,786 1,715,680
Capital assets being depreciated, net 343,437,782 21,133,294 3,909,851 368,480,927 11,611,256
Total noncurrent assets 369,845,887 47,095,415 4,414,092 421,355,394 13,326,936
Total assets 404,813,371 56,796,200 6,380,759 467,990,330 19,639,827
Deferred outflows of resources
Deferred refunding loss 1,389,152 1,767,053 7,291 3,163,496 6,879
Liabilities
Current liabilities:
Accounts payable 915,507 208,758 148,915 1,273,180 1,507,694
Deposits payable - 57,355 4,140 61,495 -
Accrued interest payable 903,883 156,314 8,784 1,068,981 45,622
Accrued payroll 54,026 23,900 16,456 94,382 91,170
Claims incurred but not reported - - - - 831,808
Due to other funds 6,385,597 5,271 6,390,868 1,305,000
Negative equity in pooled cash and investments - - - 631,781
Unearned revenues - - 107,547 107,547 -
Bonds and notes payable,current portion 12,234,366 1,745,000 308,649 14,288,015 848,702
Compensated absences,current portion 35,907 2,406 - 38,313 104,136
Total current liabilities 20,529,286 2,193,733 599,762 23,322,781 5,365,913
Noncurrent liabilities:
Bonds and notes payable, net of current portion 147,292,667 36,950,266 1,664,432 185,907,365 5,367,167
Compensated absences, net of current portion 464,533 119,620 243,537 827,690 712,837
Total noncurrent liabilities 147,757,200 37,069,886 1,907,969 186,735,055 6,080,004
Total liabilities 168,286,486 39,263,619 2,507,731 210,057,836 11,445,917
Net position
Net investment in capital assets 203,387,725 8,622,814 2,448,302 214,458,841 7,117,946
Restricted for debt retirement 8,029,091 - - 8,029,091 -
Restricted for capital projects - 717,005 - 717,005 -
Unrestricted 26,499,221 9,959,815 1,432,017 37,891,053 1,082,843
Total net position $ 237,916,037 $ 19,299,634 $ 3,880,319 $ 261,095,990 $ 8,200,789
The accompanying notes are an integral part of the financial statements.
46
CITY OF LANSING, MICHIGAN
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
For the Year Ended June 30, 2014
Governmental
Business-type Activities-Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Operating revenues
Charges for services $ 31,759,698 $ 7,453,476 $ 5,828,869 $ 45,042,043 $ 75,132,329
Operating expenses
Personal services 6,093,500 2,489,630 3,687,771 12,270,901 7,756,339
Purchase of goods and services 7,331,401 1,123,430 2,650,214 11,105,045 66,545,184
Depreciation 10,315,747 2,379,395 257,814 12,952,956 1,482,063
Total operating expenses 23,740,648 5,992,455 6,595,799 36,328,902 75,783,586
Operating income(loss) 8,019,050 1,461,021 (766,930) 8,713,141 (651,257)
Nonoperating revenues(expenses)
Intergovernmental - 1,702,664 - 1,702,664
Interest revenue 237,096 - 9,520 246,616 -
Gain on sale of capital assets - 2,600 - 2,600 345,736
Interest expense and fees (4,169,230) (1,859,247) (48,538) (6,077,015) (186,980)
Other revenue(expense) (772,931) 872,285 99,354
Total nonoperating expenses (4,705,065) 718,302 (39,018) (4,025,781) 158,756
Income(loss)before transfers 3,313,985 2,179,323 (805,948) 4,687,360 (492,501)
Transfers in - - 1,021,287 1,021,287 1,620,000
Transfers out (300,000) - (15,650) (315,650) -
Change in net position 3,013,985 2,179,323 199,689 5,392,997 1,127,499
Net position, beginning of year,as restated 234,902,052 17,120,311 3,680,630 255,702,993 7,073,290
Net position,end of year $ 237,916,037 $ 19,299,634 $ 3,880,319 $ 261,095,990 $ 8,200,789
The accompanying notes are an integral part of the financial statements.
47
CITY OF LANSING, MICHIGAN
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2014
Governmental
Business-type Activities-Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Cash flows from operating activities
Cash received from customers $ 32,721,037 $ 5,277,936 $ 5,858,989 $ 43,857,962 $ -
Cash received from interfund services - - - - 76,095,336
Cash payments for goods and services (6,797,386) (1,066,882) (3,195,129) (11,059,397) (66,846,625)
Cash payments to employees (6,006,460) (2,445,797) (3,668,415) (12,120,672) (7,600,534)
Net cash provided by(used in)operating activities 19,917,191 1,765,257 (1,004,555) 20,677,893 1,648,177
Cash flows from noncapital financing activities
Transfers in - - 1,021,287 1,021,287 1,620,000
Transfers out (300,000) - (15,650) (315,650) -
Cash received on interfund advances 107,103 - 107,103 -
Net cash provided by(used in)
noncapital financing activities (300,000) 107,103 1,005,637 812,740 1,620,000
Cash flows from capital and related financing activities
Proceeds from sale of capital assets 2,600 - 2,600 345,736
Acquisition and construction of capital assets (2,432,607) (658,465) (1,806,073) (4,897,145) (4,606,487)
Cash received for finance charges - 53,174 - 53,174 -
Proceeds from issuance of long-term debt 2,582,707 7,245,000 1,737,700 11,565,407 1,550,855
Principal paid on long-term debt (14,199,930) (1,685,000) (169,619) (16,054,549) (730,835)
Interest paid on long-term debt (4,303,042) (1,544,843) (38,067) (5,885,952) (173,372)
Amount paid to refunding bond escrow agent - (4,973,199) (4,973,199)
Payments received on capital lease 763,706 763,706
Net cash used in capital and related
financing activities (17,589,166) (1,560,733) (276,059) (19,425,958) (3,614,103)
Cash flows from investing activities
Interest and dividends received 239,194 - 9,520 248,714
Payments received on loans made to others - 179,993 - 179,993
Net cash provided by(used in)
investing activities 239,194 179,993 9,520 428,707
Net change in cash and cash equivalents 2,267,219 491,620 (265,457) 2,493,382 (345,926)
Cash and cash equivalents,beginning of year 17,179,358 5,922,156 2,088,070 25,189,584 4,579,096
Cash and cash equivalents,end of year $ 19,446,577 $ 6,413,776 $ 1,822,613 $ 27,682,966 $ 4,233,170
Reconciliation to statement of net position
Cash and cash equivalents $ - $ 672,573 $ 500 $ 673,073 $ 1,892,332
Equity in pooled cash and investments 10,513,603 5,024,198 1,822,113 17,359,914 2,972,619
Restricted cash and cash equivalents 8,932,974 717,005 - 9,649,979 -
Negative equity in pooled cash and investments - - - - (631,781)
$ 19,446,577 $ 6,413,776 $ 1,822,613 $ 27,682,966 $ 4,233,170
continued...
48
CITY OF LANSING, MICHIGAN
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2014
Governmental
Business-type Activities-Enterprise Funds Activities
Sewage Municipal Nonmajor
Disposal Parking Enterprise Internal
System System Funds Totals Service Funds
Reconciliation of operating income(loss)to net cash
provided by(used in)operating activities
Operating income(loss) $ 8,019,050 $ 1,461,021 $ (766,930) $ 8,713,141 $ (651,257)
Adjustments to reconcile operating income(loss)to
net cash provided by(used in)operating activities:
Depreciation expense 10,315,747 2,379,395 257,814 12,952,956 1,482,063
Net book value of disposed capital costs 245,438 - - 245,438 -
Change in operating assets and liabilities
that provided(used)cash:
Accounts receivable (1,049,035) 38,165 (12,493) (1,023,363) 12,763
Inventories 15,930 - (1,002) 14,928 371,190
Prepaids - 5,923 5,923 (143,598)
Due from other funds 2,010,374 (2,231,560) - (221,186) 950,244
Accounts payable 422,321 50,625 26,087 499,033 (334,033)
Deposits payable - 17,855 (270) 17,585 -
Accrued payroll 10,220 5,849 2,065 18,134 26,608
Claims incurred but not reported - - - - 17,794
Due to other funds (149,674) (570,000) (719,674) (195,000)
Unearned revenues - - 42,883 42,883 -
Compensated absences 76,820 37,984 17,291 132,095 111,403
Net cash provided by(used in)operating activities $ 19,917,191 $ 1,765,257 $ (1,004,555) $ 20,677,893 $ 1,648,177
concluded
Non-cash transactions
The sewer disposal system fund other revenue (expense) includes a non-cash addition to long-term debt in the amount of $772,931 for revision in
previously granted loan forgiveness applied to the balance of one of the drinking water revolving loans the year ended June 30,2014.
The municipal parking system fund received non-cash loan forgiveness of$1,702,664 for the year ended June 30,2014.
The accompanying notes are an integral part of the financial statements.
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50
CITY OF LANSING, MICHIGAN
Fiduciary Fund Financial Statement
Pension and Other Postemployment Benefit Trust Funds - Employee pension and other
postemployment benefit trust funds accept payments made by the City, invest fund resources,
calculate and pay pensions to retirees (or beneficiaries), and account for postemployment
healthcare coverage.
Combining schedules for fiduciary funds are presented in the notes to the financial statements.
Agency Funds - These funds account for resources held in a trustee or agent capacity for the 54-A
District Court.
Combining statements for agency funds are presented, by fund type, beginning on page 168.
51
CITY OF LANSING, MICHIGAN
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2014
Pension
and Other
Postemployment
Benefits Trust Agency
Funds Funds
Assets
Cash and cash equivalents $ 46,678,018 $
Equity in pooled cash and investments - 91,410
Investments:
Money market funds 4,865,668
Government obligations 75,796,958 -
Corporate bonds 591530,701
Common stocks 143,348,516
Mutualfunds 23116447520
Contribution receivable 6,731
Dividends and interest receivable 620,563
Total assets 562,491,675 $ 91,410
Liabilities
Accounts payable 11,872,990 $ -
Undistributed receipts - 91,410
Total liabilities 11,872,990 $ 91,410
Net position restricted for
Pension benefits 487,548,911
Other postemployment benefits 63,069,774
Total net position $ 550,618,685
The accompanying notes are an integral part of the financial statements.
52
CITY OF LANSING, MICHIGAN
Statement of Changes in Fiduciary Net Position
Pension and Other Postemployment Benefit Trust Funds
For the Year Ended June 30, 2014
Additions
Investment income:
Net appreciation in fair value
of investments $ 53,642,729
Interest income 4,875,014
Dividend income 1,776,438
Investment expenses (5,660)
Net investment income 60,288,521
Contributions:
Employer 43,627,667
Plan members 4,206,068
Total contributions 47,833,735
Total additions 108,122,256
Deductions
Participant benefits 70,727,799
Administrative expense 1,882,543
Total deductions 72,610,342
Change in net position 35,511,914
Net position restricted for pension and other postemployment benefits
Beginning of year 515,106,771
End of year $ 550,618,685
The accompanying notes are an integral part of the financial statements.
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54
COMPONENT UNITS
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56
CITY OF LANSING, MICHIGAN
Discretely Presented Component Units
Discretely presented component units are entities that are legally separate from the City but for
which the City is financially accountable, or their relationship with the City is such that exclusion
would cause the City's financial statements to be misleading or incomplete. The City has four
discretely presented component units:
Brownfield Redevelopment Authority
Tax Increment Finance Authority
Lansing Entertainment and Public Facilities Authority
SmartZone
Complete financial statements for each of the individual component units, excluding SmartZone,
may be obtained from the entity's administrative offices. Separately-issued financial statements
are not prepared for the SmartZone.
57
CITY OF LANSING, MICHIGAN
Combining Statement of Net Position
Discretely Presented Component Units
June 30, 2014
Lansing
Tax Entertainment
Brownfield Increment £t Public
Redevelopment Finance Facilities Smart
Authority Authority Authority Zone Totals
Assets
Cash and cash equivalents $ 952,780 $ 1,158,277 $ 192,112 $ $ 2,303,169
Receivables, net 534,195 564 428,635 963,394
Due from primary government 1,059,742 1,144,434 - 2,612 2,206,788
Inventories, prepaids and other assets - - 129,681 - 129,681
Restricted cash and cash equivalents 904,545 831,696 1,736,241
Capital assets being depreciated, net - - 14,398 - 14,398
Total assets 2,546,717 3,207,820 1,596,522 2,612 7,353,671
Deferred outflows of resources
Deferred refunding loss - 4,588,603 - - 4,588,603
Liabilities
Accounts payable and
accrued liabilities 1,235,321 15,561 260,024 1,510,906
Accrued interest payable - 15,458,601 148,924 15,607,525
Unearned revenues - - 493,788 493,788
Long-term debt:
Due within one year 241,079 - - 241,079
Due in more than one year 465,159 28,904,578 - 29,369,737
Total liabilities 1,941,559 44,378,740 902,736 47,223,035
Net position
Net investment in capital assets - - 14,398 14,398
Unrestricted (deficit) 605,158 (36,582,317) 679,388 2,612 (35,295,159)
Total net position (deficit) $ 605,158 $ (36,582,317) $ 693,786 $ 2,612 $ (35,280,761)
The accompanying notes are an integral part of the financial statements.
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59
CITY OF LANSING, MICHIGAN
Combining Statement of Activities
Discretely Presented Component Units
For the Year Ended June 30, 2014
Lansing
Tax Entertainment
Brownfield Increment £t Public
Redevelopment Finance Facilities Smart
Authority Authority Authority Zone Totals
Expenses
Brownfield redevelopment $ 1,732,268 $ - $ $ $ 1,732,268
Community development - 3,765,599 3,765,599
Recreation and culture - - 6,915,176 6,915,176
Total expenses 1,732,268 3,765,599 6,915,176 12,413,043
Program revenues
Charges for services - - 5,599,274 5,599,274
Operating grants and contributions 787,323 1,208,780 1,996,103
Total program revenues 787,323 6,808,054 7,595,377
Net program revenue (expense) (944,945) (3,765,599) (107,122) (4,817,666)
General revenues
Property taxes 1,209,741 2,515,321 269,770 3,994,832
Unrestricted investment earnings 1,903 4,438 57 6,398
Total general revenues 1,211,644 2,519,759 269,827 4,001,230
Changes in net position 266,699 (1,245,840) 162,705 - (816,436)
Net position (deficit), beginning of year,
as restated 338,459 (35,336,477) 531,081 2,612 (34,464,325)
Net position (deficit), end of year $ 605,158 $ (36,582,317) $ 693,786 $ 2,612 $ (35,280,761)
The accompanying notes are an integral part of the financial statements.
60
NOTES TO FINANCIAL STATEMENTS
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62
CITY OF LANSING, MICHIGAN
Index - Notes to Financial Statements
Pape
1. Summary of Significant Accounting Policies 64
Reporting entity
Government-wide and fund financial statements
Measurement focus, basis of accounting, and financial statement presentation
Assets, deferred outflows of resources, liabilities, deferred inflows of resources, and equity
2. Budgetary Information 73
3. Deficit Fund Equity 74
4. Deposits and Investments 75
5. Receivables 82
6. Capital Assets 83
7. Accounts Payable and Accrued Liabilities 85
8. Interfund Receivables, Payables and Transfers 85
9. Long-Term Debt 87
10.Fund Balances - Governmental Funds 92
11.Net Investment in Capital Assets 93
12.Segment Information - Enterprise Funds 93
13.Risk Management 93
14.Property Taxes 94
15.Contingent Liabilities 95
16.Pension Plans 95
17.Other Postemployment Benefits 108
18.Operating Lease 112
19.Adoption of New Accounting Pronouncement 113
20.Subsequent Events 113
63
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Lansing (the "City") was incorporated in 1859. In 1909, the City came under the provisions of
Act 279, P.A. 1909, as amended ("Home Rule City Act"). The City operates under a strong Mayor form of
government in which the Mayor is responsible for implementation and administration of City policy as
established by City Council.
The accounting and reporting policies of the City conform in all material respects to generally accepted
accounting principles (GAAP) as applicable to governments. The Governmental Accounting Standards Board
(GASB) is the standard setting body for establishing governmental accounting and financial reporting
principles, which are primarily set forth in the GASB's Codification of Governmental Accounting and
Financial Reporting Standards (GASB Codification). Following is a summary of the significant policies:
Reporting Entity
As required by generally accepted accounting principles, these financial statements present the City and its
component units, entities for which the City is considered to be financially accountable. The financial data
of the component units are included in the City's reporting entity because of the significance of their
operational or financial relationships with the City.
Blended Component Unit
A blended component unit is a legally separate entity from the City but is so intertwined with the City that
it is, in substance, the same as the City. It is reported as part of the City and its financial data is combined
with data of the appropriate funds. The City has one blended component unit, the Building Authority with
a fiscal June 30 year-end. This component unit provides services primarily to benefit the City. The
blended unit is described as follows:
The Building Authority (the "Authority") was established by the City under Act 31, Michigan Public Acts of
1948. The Mayor, with the advice and consent of City Council, appoints the Authority's governing body and
designates management. The Authority uses the proceeds of its tax-exempt bonds to finance the
construction or acquisition of capital assets for the City only. The bonds are secured by lease agreements
with the City and will be retired through lease payments from the City. The financial activity, assets,
liabilities and equity of the Authority are incorporated within the City's Municipal Parking System and Golf
enterprise funds, and the 1998 Building Authority Debt Service Fund.
Discretely Presented Component Units
Discretely presented component units are entities that are legally separate from the City but for which the
City is financially accountable, or their relationship with the City is such that exclusion would cause the
City's financial statements to be misleading or incomplete. The City has four discretely presented
component units, the Brownfield Redevelopment Authority, the Tax Increment Financing Authority, the
Lansing Entertainment and Public Facilities Authority, and the Smart Zone, each with a fiscal June 30 year-
end. The discretely presented component units are as follows:
64
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The Lansing Brownfield Redevelopment Authority ("LBRA") was established by the City on August 17,
1997, under the authority contained in Act 381, Michigan Public Acts of 1996 (the "Act"). The Act authorizes
the City to establish and to designate the boundaries of a Brownfield redevelopment zone. The Brownfield
Redevelopment Authority is appointed by City Council to preside over such a zone, and it is authorized to
promote the revitalization of environmentally distressed areas within the City of Lansing. The Act allows
the LBRA to participate in a broad range of improvement activities intended to encourage the reuse of
industrial and commercial property by offering economic incentives for redevelopment to prevent property
value deterioration. Tax increment financing plans must be approved by the City.
Tax increment financing permits the LBRA to capture tax revenues which are attributable to increases in
the value of real and personal property located within an approved project area. Current activities of the
LBRA include collections of property tax revenues on project areas for the Rite Aid Pharmacy and the
former Motor Wheel Site Plant.
The Tax Increment Finance Authority ("TIFA") was established by the City under the authority contained
in Act 450, Michigan Public Acts of 1981 ("Act 450"). Act 450 authorizes the City to designate specific
districts within its corporate limits as TIFA districts. The TIFA presides over such districts, formulating plans
for public improvements, economic development, neighborhood revitalization, and historic preservation
within the districts. Act 450 allows the TIFA to participate in a broad range of improvement activities
intended to contribute to economic growth and prevent property value deterioration. The TIFA's governing
body is appointed by the Mayor with the advice and consent of the City Council. Bond issuances, to fund the
above activities, are approved by the City Council and the legal liability for the debt remains with the City.
The Lansing Entertainment and Public Facilities Authority ("LEPFA") was established under the charter of
the City of Lansing in February 1996, replacing the former Greater Lansing Convention/Exhibition Authority,
which had been responsible for operating and managing the Lansing Center and the Lansing Civic Arena (the
latter through the fiscal year ended June 30, 1995). LEPFA was established to oversee the management and
operations of the Lansing Center, the City Market and the Cooley Law School stadium.
LEPFA is chartered as a building authority under the provisions of Act 31, Public Acts of Michigan, 1948. In
the event of dissolution or termination of LEPFA, all assets and rights of the Authority shall revert to the
City. LEPFA's Board of Commissioners consists of thirteen members appointed by the Mayor of the City of
Lansing and approved by the City Council.
The Lansing Regional SmartZone ("SmartZone") was established by the City of Lansing and the City of East
Lansing under the authority contained in Act 281, Public Act of Michigan of 1986 ("Act 281"). Act 281
authorizes the Cities to create a multi-jurisdictional local development finance authority. The SmartZone
shall be known and exercise its powers under title of the Local Development Finance Authority of the Cities
of Lansing and East Lansing. The SmartZone is fiscally dependent on the City of Lansing; the City approves
the annual budget and is responsible for managing the SmartZone. The SmartZone was created in order to
eliminate the conditions of unemployment, underemployment and joblessness, and to promote economic
growth in the City. The SmartZone's Board of Commissioners consists of seven members, three of which are
appointed by the City of Lansing, three are appointed by the City of East Lansing, and one is appointed by
the Ingham County Board of Commissioners.
65
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Component Unit Financial Statements
Complete financial statements for the individual component units may be obtained from each entity's
administrative offices. Separate financial statements are not prepared for the SmartZone.
City of Lansing Building Authority
8th Floor
124 West Michigan Avenue
Lansing, Michigan 48933
Brownfield Redevelopment Authority / Tax Increment Finance Authority
1000 S Washington Avenue, Suite 201
Lansing, Michigan 48910
Lansing Entertainment and Public Facilities Authority
333 East Michigan Avenue
Lansing, Michigan 48933
Government-Wide and Fund Financial Statements
The government wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the nonfiduciary activities of the primary government and its
component units. For the most part, the effect of interfund activity has been removed from these
statements. Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business type activities, which rely to a significant extent on fees
and charges for support. Likewise, the primary government is reported separately from certain component
units for which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include (1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or
segment and (2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds,
even though the latter are excluded from the government-wide financial statements. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
66
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Measurement Focus Basis of Accounting, and Financial Statement Presentation
The government wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements.
Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of
the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are
levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed
by the provider have been met. Agency funds, a type of fiduciary fund, are unlike all other types of funds,
reporting only assets and liabilities. Therefore, agency funds cannot be said to have a measurement focus.
They do, however, use the accrual basis of accounting to recognize receivables and payables.
Governmental funds are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Under this method, revenues are recognized when measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. The City considers all revenues reported in the
governmental funds to be available if they are collected within three months after year-end, except for
income taxes that use a 45-day collection period, property taxes that use a 60-day collection period, and
reimbursement-based grants that use one year. Expenditures generally are recorded when a liability is
incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related
to compensated absences and claims and judgments, are recorded only when payment is due.
Property taxes, intergovernmental revenue, licenses, and interest associated with the current fiscal period
are all considered to be susceptible to accrual and as such have been recognized as revenues of the current
fiscal period. Only the portion of special assessments receivable due within the current fiscal period is
considered to be susceptible to accrual as revenue of the current period. All other revenue items are
considered to be measurable and available only when cash is received by the City.
The City reports the following major governmental fund:
General fund. This fund is the City's primary operating fund. It accounts for all the financial resources
of the primary government, except those accounted for and reported in another fund.
The City reports the following major enterprise funds:
Sewage Disposal System Fund. This fund accounts for the provision of sewage disposal services to the
residents of the City.
Municipal Parking System Fund. This fund accounts for the operation of City-owned parking facilities.
Additionally, the City reports the following fund types:
Special revenue funds are used to account for and report the proceeds of specific revenue sources that
are restricted or committed to expenditure for specified purposes other than debt service or capital
projects that comprise, or are expected to comprise a substantial portion of the fund's total reported
inflows.
Debt service funds are used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for principal, interest and related costs.
67
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Capital projects funds are used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for capital outlays, including the acquisition or construction of
capital facilities and other capital assets.
Permanent funds account for resources that are legally restricted to the extent that only earnings, and
not principal, may be used for purposes that support the government's programs.
Enterprise funds account for those operations that are financed and operated in a manner similar to
private business or where the City has decided that the determination of revenues earned, costs
incurred and/or net income is necessary for management accountability.
Internal service funds account for operations that provide services to other departments or agencies of
the City, or to other governments, on a cost-reimbursement basis. This includes operating a
maintenance facility for trucks and equipment used by the Public Service Department, health care and
self-insurance services, and information technology.
Pension and other postemployment benefit trust funds account for the accumulation of resources to be
used for retirement annuity payments to eligible full-time employees of the City, certain healthcare
costs, and other retirement distributions.
The agency fund account for resources held in a trustee or agent capacity for the 54-A District Court.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial
statements. Exceptions to this general rule are payments in lieu of taxes and various other functions of the
government. Elimination of these charges would distort the direct costs and program revenues reported for
the various functions concerned.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the
City's enterprise and internal service funds are charges to customers for sales and services. Operating
expenses for enterprise funds and internal service funds include the cost of sales and services,
administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this
definition are reported as nonoperating revenues and expenses.
Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving)
equal value in exchange, include property taxes, grants, entitlements and donations. On an accrual basis,
revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from
grants, entitlements and donations is recognized in the fiscal year in which all eligibility requirements have
been satisfied.
Restricted net position are assets that are subject to restrictions beyond the government's control. The
restrictions may be externally imposed or imposed by law. When both restricted and unrestricted resources
are available for use, it is the government's policy to use restricted resources first, then unrestricted
resources as they are needed.
68
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Assets, deferred outflows of resources, liabilities, deferred inflows of resources, and equity
Deposits and investments
The City maintains an investment pool for all City funds. Each fund's portion of the investment pool is
displayed on the statement of net position/balance sheet as "equity in pooled cash." The City's cash and
cash equivalents are considered to be cash on hand, demand deposits and short-term investments with
original maturities of three months or less from the date of acquisition.
Restricted cash consists of amounts required to be maintained separately in accordance with bond
covenants.
State statutes authorize the City to invest in:
Bonds, securities, other obligations and repurchase agreements of the United States, or an agency or
instrumentality of the United States.
Certificates of deposit, savings accounts, deposit accounts or depository receipts of a qualified financial
institution.
Commercial paper rated at the time of purchase within the two highest classifications established by not
less than two standard rating services and that matures not more than 270 days after the date of
purchase.
Bankers' acceptances of United States banks.
Obligations of the State of Michigan and its political subdivisions, that, at the time of purchase are rated
as investment grade by at least one standard rating service.
Mutual funds registered under the Investment Company Act of 1940 with the authority to purchase only
investment vehicles that are legal for direct investment by a public corporation.
External investment pools as authorized by Public Act 20 as amended through December 31, 1997.
Investments are stated at fair value. Short-term investments are reported at cost, which approximates fair
value. Securities traded on a national or international exchange are valued at the last reported sales price
at current exchange rates. Mortgages are valued on the basis of future principal and interest payments, and
are discounted at prevailing interest rates for similar instruments. Investments that do not have established
market values are reported at estimated fair value. Cash deposits are reported at carrying amounts, which
reasonably approximates fair value.
Unrealized appreciation or depreciation on pension and other postemployment benefit trust fund
investments due to changes in fair value are recognized each year.
69
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Receivables and payables
All trade and delinquent property tax receivables are shown net of an allowance for uncollectibles, as
applicable.
Certain receivables in governmental funds consist of rehabilitation and redevelopment loans that are
generally not expected or scheduled to be collected in the subsequent year.
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end
of the fiscal year are referred to as either interfund receivables/payables (i.e., the current portion of
interfund loans) or advances to/from other funds (i.e., the non-current portion of interfund loans). All other
outstanding balances between funds are reported as due to/from other funds. Any residual balances
outstanding between the governmental and business-type activities are reported in the government-wide
financial statements as internal balances.
Inventories, prepaids and other assets
All inventories are valued at cost using the first-in/first-out method. Inventories of governmental funds are
recorded as expenditures when consumed.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both government-wide and fund financial statements.
Capital assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items acquired or constructed since June 30, 1980), are reported in the applicable
governmental or business-type activities columns in the government-wide financial statements. Capital
assets that are used for governmental activities are only reported in the government-wide statements.
Infrastructure ("public domain") assets, including roads, bridges, sanitary sewers, drains, curbs, and gutters
are capitalized. With this measurement focus, all assets and liabilities (whether current or noncurrent)
associated with the operations of these funds are included on the government-wide statement of net
position.
All land and non-depreciable land improvements are capitalized, regardless of cost. Equipment and
vehicles are capitalized when the cost of individual items exceed $5,000. The road and sewer networks are
all capitalized regardless of cost. Buildings are capitalized over $100,000, and the recreational facilities'
thresholds range from $25,000 to $50,000.
70
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Capital assets of the primary government are depreciated using the straight-line method over the following
estimated useful lives:
Years
Buildings 20-50
Improvements 8-50
Equipment 3-15
Sanitary sewers 50
Infrastructure 10-75
Deferred outflows of resources
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to one or more future periods and so will not be
recognized as an outflow of resources (expense/ expenditure) until then. The City only has one item that
qualifies for reporting in this category, which is the deferred refunding loss. A deferred refunding loss
results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is
deferred and amortized over the shorter of the life of the refunded or refunding debt.
Compensated absences
It is the government's policy to permit employees to accumulate earned but unused vacation and
compensatory time benefits, subject to certain limitations. Certain bargaining unit employees are also
permitted to accumulate earned but unused sick leave. All vacation and compensatory time pay and 50
percent of sick leave are accrued when incurred in the government-wide and proprietary fund financial
statements. A liability for these amounts is reported in governmental funds only if they have matured, for
example, as a result of employee resignations or retirements.
Long-term obligations
In the government-wide financial statements, and proprietary fund types in the fund financial statements,
long term debt and other long term obligations are reported as liabilities in the applicable governmental
activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and
discounts, are deferred and amortized over the life of the bonds using the straight-line basis. Bonds payable
are reported net of the applicable bond premium or discount. Bond issuance costs are reported as expenses
when incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well
as bond issuance costs, during the current period. The face amount of debt issued is reported as other
financing sources. Premiums received on debt issuances are reported as other financing sources while
discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld
from the actual debt proceeds received, are reported as debt service expenditures.
71
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Deferred inflows of resources
In addition to liabilities, the statement of financial position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to one or more future periods and so will not be
recognized as an inflow of resources (revenue) until that time. The governmental funds also report
unavailable revenues, which arise only under a modified accrual basis of accounting that are reported as
deferred inflows of resources. These amounts are deferred and recognized as an inflow of resources in the
period that the amounts become available.
Fund balances
Governmental funds report nonspendable fund balance for amounts that cannot be spent because they are
either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted
fund balance is reported when externally imposed constraints are placed on the use of resources by
grantors, contributors, or laws or regulations of other governments. Committed fund balance is reported
for amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of
the government's highest level of decision-making authority, the City Council. A formal resolution of the
City Council is required to establish, modify, or rescind a fund balance commitment. The City reports
assigned fund balance for amounts that are constrained by the government's intent to be used for specific
purposes, but are neither restricted nor committed. The City currently has no assigned fund balance, as the
City Council has not yet given the authority for the making of such assignments. Unassigned fund balance is
the residual classification for the general fund.
When the City incurs an expenditure for purposes for which various fund balance classifications can be
used, it is the government's policy to use restricted fund balance first, then committed fund balance,
assigned fund balance, and finally unassigned fund balance.
72
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
2. BUDGETARY INFORMATION
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
On or before the fourth Monday in March, the Mayor submits to the City Council a proposed operating
budget for the fiscal year commencing the following July 1. The operating budget includes proposed
expenditures and the means of financing them.
A public hearing on the proposed use of funds is held by the Mayor, and a public hearing on the annual
appropriations as proposed by the City Council is held no later than one week prior to adoption of the
annual appropriation measure.
Not later than the third Monday in May, the Council adopts a budget for the ensuing fiscal year, makes an
appropriation of the money needed therefore, and sets the property tax rate necessary to support the
appropriations measure.
The appropriated budget is prepared by fund, department and the mandatory expenditure accounts as
established by the State of Michigan's Uniform Chart of Accounts. Within the General Fund, the legal level
of budgetary control is the mandatory expenditure accounts (personal services, supplies and operating
expenses, capital outlay, debt service, transfers, and contingency) within each department. Within other
funds, the legal level of budgetary control is the mandatory expenditure accounts (personal services,
supplies and operating expenses, capital outlay, debt service, transfers, and contingency) within that fund.
Transfers between appropriations (mandatory accounts) require City Council approval. An exception to City
Council approval is allowed by City Charter for transfers between appropriations (mandatory accounts) for
amounts less than five thousand dollars, but not in excess of 15% of the appropriation in cases where five
thousand dollars exceeds 15%of the appropriation.
Copies of the City's separately issued budget report may be obtained from the Finance Department, 124 West
Michigan Avenue, Lansing, Michigan 48933.
The City formally adopts operating budgets for the general fund and all special revenue funds.
Budgetary integration is employed as a management control device during the year for all budgeted funds.
Except for the general fund, these budgets are adopted on a basis consistent with generally accepted
accounting principles ("GAAP"). In the general fund, capital lease payments / installment payments are
budgeted, but capital lease acquisitions are not. There were no capital lease acquisitions during the year
ended June 30, 2014.
Appropriations lapse at year-end for all annual budgets. Appropriations are automatically carried forward
for project-type budgets.
73
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
P.A. 621 of 1978, as amended, provides that a local unit shall not incur expenditures in excess of the amount
appropriated. During the year ended June 30, 2014, the City incurred expenditures in certain budgetary funds
which were in excess of the amounts appropriated, as follows:
Total Amount of Budget
Appropriations Expenditures Variance
General fund:
General government:
Mayor $ 819,940 $ 826,471 $ 6,531
Office of community media 336,680 336,702 22
Planning / neighborhood development 854,984 961,187 106,203
Public works 9,801,661 10,095,380 293,719
Recreation and culture 7,135,872 7,741,209 605,337
Other functions:
Human relations / community services 878,162 926,388 48,226
Transfers out 9,439,986 9,503,151 63,165
State and federal grants:
Public works 528,059 3,361,393 2,833,334
The above budgeted amounts are presented at the activity level, which is the required minimum level of
control per the Michigan Uniform Budget Manual.
The budget variance in the state and federal grants fund was caused by recording donated infrastructure
(constructed by the State of Michigan Department of Transportation) in the fund. This transaction included
both intergovernmental revenue and expenditures (and so had no effect on ending fund balance), but was
not reflected in the amended budget, as it was attributable to amounts recorded for in-kind roadwork
performed by the State, and therefore not subject to appropriation.
3. DEFICIT FUND EQUITY
Governmental activities reported a deficit in unrestricted net position in the amount of$46,344,555 at June
30, 2014. Total net position amounted to a positive $117,764,592.
The community development block grant program special revenue fund reported a deficit unassigned fund
balance of $200,000. Total fund balance (which included $200,000 classified as restricted related to a long-
term advance), was $0.
The special assessments capital projects fund reported a deficit fund balance of $322,157. The fund
received a long-term advance from the general fund that was used to provide the working capital for the
fund in prior years. The deficit is the result of deferred special assessments receivable. As special
assessments are collected, this deficit will be eliminated, and the advance repaid.
The golf enterprise fund reported a deficit in unrestricted fund net position of$6,077.
The fleet maintenance internal service fund reported a deficit in unrestricted fund net position of $44,547.
74
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The Tax Increment Finance Authority component unit reported a deficit in unrestricted net position of
$36,582,317 at June 30, 2014. The deficit is a result of full-accrual accounting for long-term debt, without
reflecting a corresponding receivable for tax captures to be received in future periods (which cannot be
accrued in accordance with generally accepted accounting principles).
4. DEPOSITS AND INVESTMENTS
Following is a reconciliation of deposit and investment balances for the primary government (including both
pooled cash and investments as well as pension and other postemployment benefit (OPEB) trust fund
balances) as of June 30, 2014:
Primary Component
Government Units Totals
Statement of net position
Cash and investments $ 41,777,072 $ 2,303,169 $ 44,080,241
Restricted cash and investments 9,649,979 1,736,241 11,386,220
Statement of fiduciary net position
Pension and OPEB trust funds:
Cash and cash equivalents 46,678,018 - 46,678,018
Investments 515,186,363 515,186,363
Agency funds:
Equity in pooled cash 91,410 91,410
Total $ 613,382,842 $ 4,039,410 $ 617,422,252
Deposits and investments
Bank deposits:
Checking/savings accounts $ 99,978,655
Investments - money markets 612,776
Investment in securities and mutual funds:
Pooled investments 1,470,793
Pension and OPEB investments 515,186,363
Cash on hand 173,665
Total $ 617,422,252
Custodial Credit Risk - Deposits. Custodial credit risk is the risk that in the event of a bank failure, the
City's deposits may not be returned. State law does not require and the City does not have a policy for
deposit custodial credit risk. As of year-end, $95,390,534 of the City's bank balance of $96,730,675 was
exposed to custodial credit risk because it was uninsured and uncollateralized.
The City's investment policy does not specifically address this risk, although the City believes that due to
the dollar amounts of cash deposits and the limits of FDIC insurance, it is impractical to insure all bank
deposits. As a result, the City evaluates each financial institution with which it deposits City funds and
assesses the level of risk of each institution; only those institutions with an acceptable estimated risk level
are used as depositories.
75
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Custodial Credit Risk - Investments. As of June 30, 2014, the City's pooled investments consisted entirely of
mutual funds and money markets totaling $1,251,208 and $219,585, respectively.
For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the
City will not be able to recover the value of its investments or collateral securities that are in the
possession of an outside party. State law does not require and the City does not have a policy for
investment custodial credit risk. On the investments listed above, there is no custodial credit risk, as these
investments are uncategorized as to credit risk.
Credit Risk. State law limits investments to specific government securities, certificates of deposit and
bank accounts with qualified financial institutions, commercial paper with specific maximum maturities and
ratings when purchased, bankers acceptances of specific financial institutions, qualified mutual funds and
qualified external investment pools as identified in the list of authorized investments in the summary of
significant accounting policies. The City's investment policy does not have specific limits in excess of state
law on investment credit risk. Credit risk ratings, where applicable, are summarized as follows:
S&P AAAm $ 251,618
SEW Al (Commercial Paper) 999,590
Unrated 219,585
Total $ 1,470,793
Interest Rate Risk. State law limits the allowable investments and the maturities of some of the allowable
investments as identified in the summary of significant accounting policies. The City's investment policy
does not have specific limits in excess of state law on investment maturities as a means of managing its
exposure to fair value losses arising from increasing interest rates. Maturity dates for investments held at
year-end are summarized as follows:
Due within 1 year $ 999,590
No maturity 471,203
Total $ 1,470,793
Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of
the City's investment in a single issuer. State law limits allowable investments but does not limit
concentration of credit risk as identified in the list of authorized investments in the summary of significant
accounting policies. The City's investment policy does not have specific limits in excess of state law on
concentration of credit risk. All investments held at year end are reported above.
Pension and Other Postemployment Benefit Trust Funds
The deposits and investments of the City's pension and other postemployment benefit trust funds are
maintained separately from the City's pooled cash and investments, and are subject to separate investment
policies and State statutes. Accordingly, the required disclosures for the pension and OPEB deposits and
investments are presented separately.
76
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Deposits
The pension and OPEB trust funds do not maintain any checking or other demand/time deposit accounts.
Amounts reported as cash and cash equivalents in the statement of plan net position are composed entirely
of short-term investments in money market accounts.
Investments
The Michigan Public Employees Retirement Systems' Investment Act, Public Act 314 of 1965, as amended,
authorizes the pension trust funds to invest in stocks, government and corporate securities, mortgages, real
estate, and various other investment instruments, subject to certain limitations. The retirement boards
have the responsibility and authority to oversee the investment portfolio. Various professional investment
managers are contracted to assist in managing the pension trust funds' assets. All investment decisions are
subject to Michigan law and the investment policy established by the retirement boards.
77
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The investments of each pension trust fund are held in a bank administered trust fund. Following is a
summary of pension and other postemployment benefits investments as of June 30, 2014:
Employees' Police and Fire Employees' Retiree
Retirement Retirement Money Purchase Health Care
System System Pension Plan VEBA Totals
Investments at fair value,
as determined by quoted
market price
U.S. treasuries:
Not on securities loan $ 271,352 $ 369,800 $ 10,633 $ $ 651,785
On securities loan 5,047,164 5,200,928 - 10,248,092
U.S. agencies:
Not on securities loan 17,511,071 22,060,296 6,699 39,578,066
On securities loan 575,953 732,300 - 1,308,253
Foreign government
bonds:
Not on securities
loan 1,137,500 1,844,290 2,981,790
Domestic corporate
securities:
Not on securities
loan 25,171,323 33,318,675 58,489,998
Domestic equities:
Not on securities loan 34,224,454 58,637,817 92,862,271
On securities loan 13,894,980 17,666,669 - 31,561,649
International equities:
Not on securities loan - - 9,487 9,487
Emerging markets
equities 7,422,814 11,501,782 - 18,924,596
Collateralized mortgage
obligations 481,948 558,755 1,040,703
Real estate investment
funds 13,271,008 17,027,198 30,298,206
Equity mutual funds - 8,241,876 - - 8,241,876
International equity
mutual funds 42,826,497 48,552,927 97,013 577,092 92,053,529
Domestic equity
mutual funds 27,736,178 44,843,686 530,414 9,560,263 82,670,541
Domestic debt securities
mutual funds - - 882,633 8,952,599 9,835,232
International debt securities
mutual funds - 29,145,150 - - 29,145,150
Money market funds 2,353,700 2,512,793 418,646 - 5,285,139
Total investments $ 191,925,942 $ 302,214,942 $ 1,955,525 $ 19,089,954 $ 515,186,363
78
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Credit Risk. The City's pension investment policies provide that at least 90% of its investments in fixed
income securities be rated BBB- or better by a nationally recognized statistical rating organization and the
remaining 10% be rated at least B- or better. The City's pension and other postemployment benefits
investments were rated by Standard &t Poor's as follows:
Employees' Police and Fire Employees' Retiree
Retirement Retirement Money Purchase Health Care
System System Pension Plan VEBA Totals
AA $ 2,474,496 $ 3,644,864 $ $ $ 6,119,360
BBB 20,401,605 29,145,150 49,546,755
US government
guaranteed 21,979,588 26,730,756 48,710,344
Not rated 25,332,527 32,605,430 8,952,599 66,890,556
Assets not subject
to credit risk 121,737,726 210,088,742 1,955,525 10,137,355 343,919,348
$ 191,925,942 $ 302,214,942 $ 1,955,525 $ 19,089,954 $ 515,186,363
Custodial Credit Risk. For investments, custodial credit risk is the risk that, in the event of the failure of
the counterparty, the City will not be able to recover the value of its investments or collateral securities
that are in the possession of an outside party. The City's pension investment policies require that
investment securities be held in trust by a third-party institution in the name of the pension trust fund. As
such, although uninsured and unregistered, the City's pension investments are not exposed to custodial
credit risk since the securities are held by the counterparty's trust department in the name of the pension
trust fund. Short-term investments in money market funds and open-end mutual funds are not exposed to
custodial credit risk because their existence is not evidenced by securities that exist in physical or book
form.
Concentration of Credit Risk. At June 30, 2014, the pension and other postemployment benefits investment
portfolio was concentrated as follows:
Employees' Police and Fire
Retirement Retirement
Investment Type Issuer System System
Common stock Northern Trust Back, N.A. 14.5% 14.8%
Corporate bonds Western Asset Funds, Inc. 13.1% 11.0%
International equity
mutual funds Franklin Templeton 10.6% 9.6%
International equity
mutual funds SEI Trust Company 7.0% 0.0%
International equity
mutual funds Modrian 0.0% 8.1
International equity
mutual funds Artisan 0.0% 7.9%
The City's pension and other postemployment benefits investment policies require diversification of fixed
income securities; however, they do not specify percentages of dollar amounts by industry or issuer.
79
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Foreign Currency Risk. Foreign currency risk is the risk that changes in exchange rates will adversely affect
the fair value of an investment or deposit. The pension and other postemployment benefits trusts' exposure
to foreign currency risk is as follows:
Employees' Police and Fire Employees' Retiree
Investment Retirement Retirement Money Purchase Health Care
(currency in U.S. dollar) System System Pension Plan VEBA Totals
International equities:
Canada $ 489,030 $ 739,632 $ $ $ 1,228,662
India 104,704 153,996 258,700
The Netherlands 120,702 188,068 308,770
Puerto Rico 121,394 191,787 313,181
Switzerland 63,371 99,583 162,954
United Kingdom 91,431 156,503 247,934
Foreign government bonds:
Egypt 146,869 314,720 461,589
International equity
mutual funds 50,249,311 89,199,859 106,500 577,092 140,132,762
Total $ 51,386,812 $ 91,044,148 $ 106,500 $ 577,092 $ 143,114,552
Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the fair
market value of an investment. The City's pension investment policies provide that the average duration of
fixed income securities shall not deviate from the Lehman Brothers Aggregate Index duration by +/-20%. As
of June 30, 2014, maturities of the City's pension and other postemployment benefits trust debt securities
were as follows:
Investment Maturities (Fair Value)
Less than More than
1 year 1-5 years 6-10 years 10 years Total
Employees' Retirement
System
U.S. agencies $ $ 2,485,216 $ 569,363 $ - $ 3,054,579
U.S. government bonds 2,735,831 1,100,364 2,619,822 6,456,017
U.S. government mortgage
backed securities 7,636 998,878 1,850,335 10,649,952 13,506,801
U.S. government issued
commercial mortgage
backed securities - 40,238 382,492 453,132 875,862
Commercial mortgage
backed securities - - 117,639 364,310 481,949
Total $ 7,636 $ 6,260,163 $ 4,020,193 $ 14,087,216 $ 24,375,208
80
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Investment Maturities (Fair Value)
Less than More than
1 year 1-5 years 6-10 years 10 years Total
Police and Fire Retirement
System
U.S. agencies $ $ 3,322,411 $ 788,877 $ - $ 4,111,288
U.S. government bonds 3,122,018 743,863 3,549,135 7,415,016
U.S. government mortgage
backed securities 8,646 1,777,555 2,458,857 12,625,304 16,870,362
U.S. government issued
commercial mortgage
backed securities - 50,989 448,703 553,175 1,052,867
Commercial mortgage
backed securities - - 151,250 407,505 558,755
Corporate bonds 224,420 - - - 224,420
Total $ 233,066 $ 8,272,973 $ 4,591,550 $ 17,135,119 $ 30,232,708
Securities Lending. Under contracts approved by the City, the pension and other postemployment benefits
trust funds are permitted to lend their securities to broker-dealers and banks (borrowers) for collateral that
will be returned for the same securities in the future. The pension trust and other postemployment benefits
funds' custodial banks manage the securities lending programs and receive cash as collateral. Collateral
cash is initially pledged at 100 percent of the fair value of the securities lent, and may not fall below 95
percent of the market value of the loaned security during the term of the loan. At all times, collateral
cannot be more than $100,000 less than the market value of the loaned security. There are no restrictions
on the amount of securities that can be loaned.
Securities on loan at year-end are classified in the preceding schedule of custodial credit risk according to
the category for the collateral received on the securities lent. At year-end, the pension trust funds have no
credit risk exposure to borrowers because the collateral held by the custodians exceeds the market value of
the related securities lent. At June 30, 2014, the fair value of securities on loan by the Employees'
Retirement System and the Police and Fire Retirement System were $19,518,097 and $23,599,897,
respectively, for which the Plans' received cash collateral of $19,932,018 and $24,105,140, respectively.
The contract with the pension and other postemployment benefits trust fund custodians require them to
indemnify the City if the borrowers fail to return the securities (and if the collateral is inadequate to
replace the securities lent) or fail to pay the City for income distributions by the securities' issuers while
the securities are on loan.
81
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
5. RECEIVABLES
Receivables are comprised of the following:
Governmental Business-type Component
Activities Activities Units
Accounts receivable $ 22,534,881 $ 5,903,964 $ 429,199
Taxes receivable 628,201 - -
Special assessments receivable 500,778 - -
Loansreceivable 1,432,342 706,238 377,389
Accrued interest receivable 2,147,867 126,864 -
Due from other governments 10,925,845 - 156,806
Lease receivable - 21,880,012 -
Allowance for uncollectible accounts (639,590) (360,733) -
$ 37,530,324 $ 28,256,345 $ 963,394
Amount not expected to be
collected within one year $ 4,024,805 $ 21,732,478 $ 377,389
82
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
6. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2014 was as follows:
Beginning Ending
Balance Additions Disposals Transfers Balance
Governmental activities
Capital assets, not being depreciated:
Land $ 25,690,735 $ 34,937 $ - $ - $ 25,725,672
Construction in progress 5,289,601 4,487,045 (562,857) (6,932,376) 2,281,413
30,980,336 4,521,982 (562,857) (6,932,376) 28,007,085
Capital assets, being depreciated:
Land improvements 16,050,745 369,734 852,452 17,272,931
Equipment and vehicles 40,374,027 2,174,031 (7,160,243) - 35,387,815
Buildings 118,768,823 (1,495,736) 6,079,924 123,353,011
Infrastructure 301,549,180 4,548,553 (3,105,415) - 302,992,318
476,742,775 7,092,318 (11,761,394) 6,932,376 479,006,075
Less accumulated depreciation for:
Land improvements (7,485,484) (647,368) - - (8,132,852)
Equipment and vehicles (34,913,711) (1,925,382) 7,160,243 (29,678,850)
Buildings (67,532,695) (3,569,572) 798,741 (70,303,526)
Infrastructure (204,850,283) (9,076,092) 2,962,527 (210,963,848)
(314,782,173) (15,218,414) 10,921,511 - (319,079,076)
Total capital assets
being depreciated, net 161,960,602 (8,126,096) (839,883) 6,932,376 159,926,999
Governmental activities
capital assets, net $ 192,940,938 $ (3,604,114) $ (1,402,740) $ - $ 187,934,084
At June 30, 2014, the City's governmental activities had outstanding commitments through construction
contracts of approximately $1,970,000.
83
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Beginning Ending
Balance Additions Disposals Transfers Balance
Business-type activities
Capital assets, not being depreciated:
Land $ 13,483,909 $ - $ - $ - $ 13,483,909
Construction in progress 8,509,838 1,593,365 (245,438) (2,211,888) 7,645,877
21,993,747 1,593,365 (245,438) (2,211,888) 21,129,786
Capital assets, being depreciated:
Land improvements 24,246,241 338,888 24,585,129
Equipment and vehicles 5,673,556 1,828,460 (339,047) 119,675 7,282,644
Buildings 214,841,965 927,845 100,000 215,869,810
Sewers 332,807,283 547,475 1,653,325 335,008,083
577,569,045 3,303,780 (339,047) 2,211,888 582,745,666
Less accumulated depreciation for:
Land improvements (12,067,058) (610,084) - - (12,677,142)
Equipment and vehicles (5,387,275) (278,991) 339,047 (5,327,219)
Buildings (109,609,169) (5,160,199) - (114,769,368)
Sewers (74,587,328) (6,903,682) (81,491,010)
(201,650,830) (12,952,956) 339,047 (214,264,739)
Total capital assets
being depreciated, net 375,918,215 (9,649,176) - 2,211,888 368,480,927
Business-type activities
capital assets, net $ 397,911,962 $ (8,055,811) $ (245,438) $ - $ 389,610,713
At June 30, 2014, the City's business-type activities had outstanding commitments through construction
contracts of approximately $2,450,000.
Depreciation expense was charged to functions/programs of the primary government as follows:
Depreciation of governmental activities by function
General government $ 1,796,295
Public safety 589,717
Public works 9,076,092
Recreation and culture 461,895
Community development 1,812,352
Internal service funds 1,482,063
Total depreciation expense - governmental activities $ 15,218,414
84
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Depreciation of business-type activities by function
Sewage disposal system $ 10,315,747
Municipal parking system 2,379,395
Cemetery 16,190
Golf 91,118
Recycling 150,506
Total depreciation expense - business-type activities $ 12,952,956
7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities are comprised of the following:
Governmental Business-type Component
Activities Activities Units
Accounts payable $ 7,642,113 $ 1,273,180 $ 1,510,906
Deposits payable 47,028 61,495 -
Accrued payroll 2,059,166 94,382
Contract retainage payable 200,089 -
Due to other governments 3,250,250
Other 1,440,262 - -
$ 14,638,908 $ 1,429,057 $ 1,510,906
8. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
The composition of interfund balances as of June 30, 2014, was as follows:
Due to and from primary government funds
Due from Due to Other
Other Funds Funds
General fund $ 6,390,868 $ 20,613,895
Nonmajor governmental funds 4,055,000 3,780,000
Sewage disposal system 18,385,874 6,385,597
Municipal parking system 3,258,021 -
Nonmajor enterprise funds - 5,271
Internal service funds - 1,305,000
Total $ 32,089,763 $ 32,089,763
The above balances generally resulted from a time lag between the dates that interfund goods and services
are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and
payments between funds are made.
85
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Advances to and from primary government funds
Advances to Advances from
Other Funds Other Funds
Nonmajor governmental funds $ - $ 362,224
Municipal parking system 362,224 -
Total $ 362,224 $ 362,224
Due to and from component units
Due from Due to
primary component
government unit
General fund $ - $ 2,206,788
Brownfield Redevelopment Authority 1,059,742 -
Tax Increment Finance Authority 1,144,434
SmartZone 2,612 -
Total $ 2,206,788 $ 2,206,788
For the year ended June 30, 2014, interfund transfers consisted of the following:
Transfers In
Nonmajor Nonmajor Internal
governmental enterprise service
Transfers Out General fund funds funds funds Total
General fund $ - $ 7,840,967 $ 42,184 $ 1,620,000 $ 9,503,151
Nonmajor governmental funds 85,000 2,280,545 979,103 - 3,344,648
Sewage disposal system 300,000 - - 300,000
Nonmajor enterprise funds - 15,650 - - 15,650
Total $ 385,000 $ 10,137,162 $ 1,021,287 $ 1,620,000 $ 13,163,449
Transfers are used to: (1) move revenues from the fund that is required to collect them to the fund that is
required or allowed to expend them; (2) move receipts restricted to or allowed for debt service from the
funds collecting the receipts to the debt service fund as debt service payments become due; and (3) use
unrestricted revenues collected in the general fund to finance various programs accounted for in other
funds in accordance with budgetary authorizations.
86
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
9. LONG-TERM DEBT
General obligation bonds. The government issues general obligation bonds to provide funds for the
acquisition and construction of major capital facilities. General obligation bonds are direct obligations and
pledge the full faith and credit of the government. These bonds are issued as 10 to 30-year serial bonds
with varying amounts of principal maturing each year. General obligation bonds currently outstanding are
as follows:
Interest Original
Rate Amount Amount
General obligation bonds
Governmental activities:
2006 Lansing Center Limited Tax Bonds 3.50-4.30% $ 4,000,000 $ 2,330,000
2005 Building Authority Refunding Bonds 3.50-5.00% 1,470,000 615,000
2007 Michigan Transportation Fund Limited Tax Bonds 3.625-5.00% 1,137,600 396,000
2007 Michigan Transportation Fund Limited Tax Bonds 3.625-5.00% 3,602,400 1,254,000
2007 Fire Station Refunding Bonds 3.625-5.00% 1,780,000 1,000,000
2008 Michigan Transportation Fund Limited Tax Bonds 3.00-4.00% 3,500,000 1,910,000
2009 Capital Improvement Bonds - Limited Tax General 3.15-6.85% 10,197,000 9,380,000
2010 Recovery Zone Economic Development Bonds 3.40-7.25% 3,200,000 2,925,000
2010 Refunding Bonds - Limited Tax General Obligation 2.60-2.65% 2,470,000 1,540,000
2013 Refunding Bonds - Limited Tax General Obligation
Energy Efficiency Refunding Bonds 2.40% 5,645,000 5,305,000
2013 Refunding Bonds - Limited Tax General Obligation
Phone System Refunding Bonds 2.40% 240,000 180,000
2013 Operations and Maintenance Limited Tax Refunding 2.40% 465,000 310,000
$ 37,707,000 $ 27,145,000
87
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Interest Original
Rate Amount Amount
Business-type activities:
2005 Building Authority Refunding Bonds 3.50-5.00% $ 15,975,000 $ 8,900,000
2007 Building Authority Refunding Bonds 3.625-5.00% 7,965,000 7,775,000
1993 Limited Tax Sewer Bond - 5005-02 2.50% 8,150,050 470,000
1994 Limited Tax Sewer Bond - 5005-03 2.50% 3,234,722 370,000
1994 Limited Tax Sewer Bond - 5005-04 2.00% 3,727,138 241,170
1994 Limited Tax Sewer Bond - 5005-06 2.25% 7,595,611 675,000
1996 Limited Tax Sewer Bond - 5005-07 2.25% 3,365,073 590,073
1996 Limited Tax Sewer Bond - 5005-08 2.25% 3,995,000 950,000
1997 Limited Tax Sewer Bond - 5005-09 2.25% 4,746,780 1,361,780
1998 Limited Tax Sewer Bond - 5005-10 2.25% 10,539,950 3,604,950
1999 Limited Tax Sewer Bond - 5005-11 2.50% 10,120,000 3,585,000
2000 Limited Tax Sewer Bond - 5005-12 2.50% 9,447,830 3,797,830
2001 Limited Tax Sewer Bond - 5005-13 2.50% 10,573,046 4,818,046
2002 Limited Tax Sewer Bond - 5005-14 2.50% 12,381,131 6,821,131
2003 Limited Tax Sewer Bond - 5005-15 2.50% 10,259,826 6,170,688
2004 Limited Tax Sewer Bond - 5005-16 2.13% 3,070,277 2,447,649
2005 Limited Tax Sewer Bond - 5005-17 2.13% 1,609,661 5,048,778
2005 Limited Tax Sewer Bond - 5005-18 1.63% 13,389,371 8,819,371
2006 Limited Tax Sewer Bond - 5005-19 1.63% 18,216,346 13,181,346
2007 Limited Tax Sewer Bond - 5005-20 1.63% 24,244,726 18,514,726
2008 Limited Tax Sewer Bond - 5005-21 2.50% 27,500,453 22,920,453
2009 Limited Tax Sewer Bond - 5005-22 2.50% 15,615,000 13,220,604
2010 Limited Tax Sewer Bond - 5411-01 2.50% 8,548,000 8,208,000
2009 Capital Improvement Bonds 4.10-7.05% 9,803,000 9,655,000
2009 Building Authority Refunding Bonds 6.014-6.584% 8,161,691 8,161,691
2012 Building Authority Refunding Bonds 0.55-3.70% 7,200,000 6,805,000
2013 Building Authority Refunding Bonds 2.40% 735,000 370,000
2013 Building Authority Golf Course Refunding Bonds 2.40% 405,000 305,000
2014 Building Authority Refunding Bonds 4.75% 7,245,000 7,245,000
$ 267,819,682 $ 175,033,286
On April 9, 2014, the City issued $3,375,000 of Limited Tax General Obligation bonds under the state
drinking water revolving fund to be used for sanitary sewer system improvements. Payments of amounts
drawn are to be made semi-annually over a 20 year period, beginning on April 1, 2016. Interest is charged
on the outstanding balance at 2.50 percent. As of June 30, 2014, no amounts had been drawn on this loan.
Refunded and Defeased Debt
At year end, defeased bonds outstanding consisted of $4,140,000 of 1990 Building Authority Bonds,
scheduled to be paid by the escrow agent on June 1, 2015; $10,415,000 of 1990 Tax Increment Finance
Authority Bonds, scheduled to be paid by the escrow agent in installments on May 1 of years 2016 through
2020; and $2,565,000 in 1994 Tax Increment Financing Bonds, scheduled to be paid by the escrow agent on
May 1 of years 2015 and 2016.
88
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
During fiscal year 2014, the City advance refunded $4,975,000 of 1990 Building Authority Bonds to provide
resources to purchase U.S. government securities that were placed in an escrow fund for the purpose of
generating resources for all future debt service payments of $4,975,000 of refunded debt. As a result, the
bonds are considered defeased and the liability has been removed from the statement of net position. The
reacquisition price of the refunding bonds was less than the carrying amount of the refunded debt and
remaining unamortized discount by $1,156,324 and, accordingly, that amount is being amortized over the
remaining years of the refunded debt. The refunding resulted in an increase in future debt service cash
flows of $7,859,444 and an economic loss of$375,159.
During fiscal year 2014, the Tax Increment Financing Authority component unit advance refunded $612,587
of principal and $1,952,413 of accrued interest related to 1994 Tax Increment Revenue Bonds to provide
resources to purchase U.S. government securities that were placed in an escrow fund for the purpose of
generating resources for all future debt service payments on $2,565,000 of refunded debt. As a result, the
bonds are considered defeased and the liability has been removed from the statement of net position. The
reacquisition price of the refunding bonds was less than the carrying amount of the refunded debt by $8,863
and, accordingly, is being amortized of the remaining years of the refunded debt. The refunding resulted in
an increase in future debt service cash flows of $4,025,425 and an economic loss of$312,935.
Revenue bonds. The City also issues bonds where the income derived from the acquired or constructed
assets is pledged to pay debt service. Revenue bonds outstanding at year-end are as follows:
Interest Original
Rate Amount Amount
Revenue bonds - business type activities
2013 Sewer Revenue and Refunding Bond 2.40% $ 64,330,000 $ 21,765,000
Installment purchase agreements. The government enters into installment purchase agreements for
equipment and related capital assets. Installment purchase agreements outstanding at year-end are as
follows:
Interest Original
Rate Amount Amount
Installment purchase agreements
Governmental activities:
2005 Lease Purchase Agreement - LEPFA Carpet 4.51% $ 126,418 $ 15,459
2005 Lease Purchase Agreement - LEPFA Equipment 4.24% 81,500 14,553
2012 Lease Purchase Agreement - Snowmobile 2.40% 147,046 63,199
2013 Lease Purchase Agreement - Garage 2.40% 1,892,332 1,518,630
2014 Lease Purchase Agreement - Recycling Trucks 1.96% 1,550,855 1,488,722
$ 3,798,151 $ 3,100,563
89
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Loans payable. The government has entered into loan agreements with the certain State agencies for
program purposes. Loans payable at year-end are as follows:
Interest Original
Rate Amount Amount
Loans payable
Governmental activities:
2004 Michigan Department of Transportation Loan 3.00% $ 1,266,000 $ 175,934
HUD Section 108 Loan 2.40% 5,900,000 5,900,000
2014 SIB Loan 3.00% 986,300 986,300
$ 8,152,300 $ 7,062,234
Changes in long-term debt. Long-term liability activity for the year ended June 30, 2014, was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities
General obligation bonds $ 29,932,000 $ - $ 2,787,000 $ 27,145,000 $ 2,915,000
Installment purchase
agreements 2,807,838 1,550,855 1,258,130 3,100,563 624,065
Loans payable 6,246,743 986,300 170,809 7,062,234 175,934
Total installment debt 38,986,581 2,537,155 4,215,939 37,307,797 3,714,999
Deferred amounts:
For issuance discounts (93,487) - (6,833) (86,654) -
For issuance premiums 156,091 - 34,143 121,948 -
Compensated absences 10,138,900 10,153,254 10,138,900 10,153,254 1,061,687
Accrued workers
compensation 6,986,062 6,875 1,025,344 5,967,593 922,154
Accrued tax settlement 156,483 - 52,161 104,322 52,161
$ 56,330,630 $ 12,697,284 $ 15,459,654 $ 53,568,260 $ 5,751,001
90
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Business-type activities
General obligation bonds $ 182,127,578 $ 10,600,638 $ 17,694,930 $ 175,033,286 $ 12,589,366
Revenue bonds 25,030,000 - 3,265,000 21,765,000 1,490,000
Installment purchase
agreements - 1,737,700 69,619 1,668,081 208,649
Loans payable 1,702,664 - 1,702,664 - -
Total installment debt 208,860,242 12,338,338 22,732,213 198,466,367 14,288,015
Deferred amounts:
For issuance discounts (2,020,876) (90,562) (1,238,800) (782,377) -
For issuance premiums 2,751,555 - 240,165 2,511,390 -
Compensated absences 733,908 866,003 733,908 866,003 38,313
$ 210,324,829 $ 13,113,779 $ 22,467,486 $ 201,061,383 $ 14,326,328
For the governmental activities, compensated absences and other long-term debt are generally liquidated
by the general fund.
Debt service requirements to maturity for all installment debt of the City are as follows:
Year Governmental Activities Business-type Activities
Ending
June 30 Principal Interest Total Principal Interest Total
2015 $ 3,714,999 $ 1,165,100 $ 4,880,099 $ 14,288,015 $ 5,842,667 $ 20,130,682
2016 3,626,430 1,104,077 4,730,507 14,129,564 5,129,518 19,259,082
2017 3,638,884 961,378 4,600,262 13,762,020 4,758,314 18,520,334
2018 3,557,278 829,484 4,386,762 13,756,223 4,387,717 18,143,940
2019 2,730,666 712,539 3,443,205 13,777,360 4,034,799 17,812,159
2020-2024 10,304,539 2,303,794 12,608,333 68,221,571 14,280,657 82,502,228
2025-2029 7,430,000 882,463 8,312,463 43,392,558 6,279,535 49,672,093
2030-2034 2,305,001 17,038 2,322,039 12,304,057 2,337,240 14,641,297
2035-2039 - - - 4,834,999 710,362 5,545,361
$ 37,307,797 $ 7,975,873 $ 45,283,670 $ 198,466,367 $ 47,760,809 $ 246,227,176
91
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
10. FUND BALANCES - GOVERNMENTAL FUNDS
In accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type
Definitions, the City classifies fund balances based primarily on the extent to which it is bound to observe
constraints imposed upon the use of the resources reported in governmental funds. Detailed information on
fund balances of governmental funds is as follows:
Nonmajor
General Governmental
Fund Funds Totals
Nonspendable
Inventories $ 49,601 $ 833,380 $ 882,981
Prepaids 30,169 - 30,169
Corpus of permanent fund - 1,718,595 1,718,595
79,770 2,551,975 2,631,745
Restricted
Donations 36,854 - 36,854
Major and local streets - 5,449,942 5,449,942
Drug law and narcotics
enforcement 1,084,370 1,084,370
Various state and federal grants 4,353 4,353
Shopping district events
and maintenance 12,609 12,609
Building permit activity 168,229 168,229
Capital improvements (unexpended
bond proceeds) - 183,425 183,425
36,854 6,902,928 6,939,782
Committed
Police and fire services 1,810,325 - 1,810,325
By ordinance (budgetcarryforwards) 228,283 - 228,283
Community development - 200,000 200,000
City parks 466,888 466,888
Capital improvements - 3,956,224 3,956,224
2,038,608 4,623,112 6,661,720
Unassigned (deficit) 7,052,830 (522,157) 6,530,673
Total fund balances -
governmental funds $ 9,208,062 $ 13,555,858 $ 22,763,920
92
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
11. NET INVESTMENT IN CAPITAL ASSETS
The composition of net investment in capital assets as of June 30, 2014, was as follows:
Governmental Business-type Component
Activities Activities Units
Capital assets:
Capital assets not being depreciated $ 28,007,085 $ 21,129,786 $
Capital assets being depreciated, net 159,926,999 368,480,927 14,398
Total capital assets 187,934,084 389,610,713 14,398
Related debt:
General obligation bonds 27,145,000 175,033,286 -
Revenue bonds - 21,765,000
Installment purchase agreements 3,100,563 1,668,081
Loans payable 7,062,234 -
Unamortized bond discounts (86,654) (782,377)
Unamortized bond premiums 121,948 2,511,390
Deferred loss on bond refunding (201,592) (3,163,496)
Amounts under leases receivable - (21,880,012)
Unexpended bond proceeds (183,425) -
Totalrelated debt 36,958,074 175,151,872 -
Net investment in capital assets $ 150,976,010 $ 214,458,841 $ 14,398
12. SEGMENT INFORMATION - ENTERPRISE FUNDS
The government issued revenue bonds to finance certain improvements to its sewage disposal system.
Because the Sewage Disposal System, an individual fund that accounts entirely for the government's sewage
activities, is a segment and is reported as a major fund in the fund financial statements, separate segment
disclosures herein are not required.
13. RISK MANAGEMENT
The City of Lansing is exposed to various risks of loss related to property loss, torts, errors and omissions
and employee injuries.
The City carries commercial insurance for claims relating to general liability, property, electronic data
processing, boiler and machinery, police professional and errors and omissions. The City has not
experienced settlements in excess of insurance coverage during the past three years.
The City is uninsured for acts of nature and environmental clean-up costs.
93
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
The City is self-funded for Blue Cross Blue Shield healthcare coverage for employees and retirees. The City
maintains stop/loss coverage that limits its per-case exposure to $250,000. The City estimates healthcare
claims that are incurred but not reported as of year-end, which is accounted for in the City's Fringe Benefits
Internal Service Fund. Changes in the estimated liability were as follows:
Fiscal Year Ended June 30,
2014 2013
Estimated liability, beginning of year $ 814,014 $ 897,523
Estimated claims incurred,
including changes in estimates 11,756,639 11,130,338
Claim payments (11,738,845) (11,213,847)
Estimated liability, end of year $ 831,808 $ 814,014
The City is self-insured for workers' compensation costs. The City estimates the liability for workers'
compensation claims that have been incurred through the end of the fiscal year, including those claims that
have been reported as well as those that have not yet been reported to the City. The current liability is
accounted for in the general fund, with long term liabilities accounted for in the Statement of Net Position.
The City has liability insurance coverage up to a maximum amount of $16,000,000 per occurrence with a
$350,000 deductible. Changes in the estimated long-term liability as well as the total estimated cost of
claims for the past two fiscal years were as follows:
Fiscal Year Ended June 30,
2014 2013
Estimated liability, beginning of year $ 6,986,062 $ 7,131,238
Estimated claims incurred,
including changes in estimates 6,875 1,118,901
Claim payments (1,025,344) (1,264,077)
Estimated liability, end of year $ 5,967,593 $ 6,986,062
14. PROPERTY TAXES
Property taxes attach as an enforceable lien on property as of the date they are levied. City, community
college, and 50% of school taxes are levied and due July 1 and become delinquent after August 31. County
taxes and the balance of school taxes are levied and due December 1 and become delinquent after February
14. In March, taxes on real property still delinquent are purchased by the County's tax revolving funds.
Collections of community college, school, and county taxes and remittances are accounted for in the
general fund. City property tax revenues are recognized in the fiscal year for which the taxes are levied to
the extent that they result in current receivables (i.e., are collected within 60 days after fiscal year-end).
The City is permitted by charter and state law to levy taxes up to $20.000 per $1,000 of assessed valuation
for general operations other than the payment of principal and interest on long-term debt. The tax rate to
finance general governmental services other than the payment of principal and interest on long-term debt
for the year ended June 30, 2014 was $19.44 per $1,000 of taxable value.
94
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
15. CONTINGENT LIABILITIES
Amounts received or receivable from grantor agencies are subject to audit and potential adjustment by
grantor agencies, principally the federal government. Any disallowed claims, including amounts already
collected, may constitute a liability of the applicable funds.
The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this
time although the government expects such amounts, if any, to be immaterial.
The government is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently
determinable, it is the opinion of the government's counsel that resolution of these matters will not have a
material adverse effect on the financial condition of the government.
16. PENSION PLANS
Employees'Retirement *stem
Plan Description. The City sponsors and administers the Employees' Retirement System (the "Plan"), a
single-employer, defined benefit pension plan that covers general full-time employees of the City of Lansing
and employees of the 54-A District Court. It does not include elected officials, who are members of the
Employees' Money Purchase Pension Plan, nor does it include police officers and firefighters, who are
members of a separate City defined benefit pension plan. The Plan was established and may be amended by
the City Council and is administered by 9-member Board of Trustees. The Board is comprised of The Mayor
of the City, one member of the City Council appointed by the City Council, the City Treasurer, the City
Human Resources Director, three members of the retirement system to be elected by the members of the
system under rules adopted by the board, two residents of the State of Michigan appointed by the Mayor, by
and with the consent of the City Council, one of which is a retiree of the retirement system. It is
accounted for as a separate pension trust fund. Separate financial statements are not issued for the Plan.
All members may retire at age 50 with 25 or more years of credited service, or age 58 with 8 or more years
of credited service. Members are vested after completing 8 years of credited service. Retirement options
that provide for survivor benefits are available to members. The plan also provides death and disability
benefits. If a member leaves employment or dies before vesting, accumulated member contributions plus
interest are refunded to the member or designated beneficiary. Members who are vested and terminate
their employment prior to retirement will receive their benefit as a life annuity beginning at age 58.
Summary of Significant Accounting Policies. The financial statements of the Plan are prepared using the
accrual basis of accounting. Plan member contributions are recognized in the period which the
contributions are due. The City's contributions are recognized when due and a formal commitment to
provide the contribution has been made. Benefits and refunds are recognized when due and payable in
accordance with the terms of the Plan. Administration of the Plan is funded through the Plan's investment
earnings.
Method Used to Value Investments. Plan investments are reported at fair value. Short-term investments are
reported at cost, which approximates fair value. Securities traded on a national or international exchange
are valued at the last reported sales price at current exchange rates. Investments for which market
quotations are not readily available are valued at their fair values as determined by the custodian under
the direction of the Plan Board of Trustees, with the assistance of a valuation service.
95
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Plan Membership. At June 30, 2014, plan membership consisted of the following:
Retirees and beneficiaries currently receiving benefits 885
Terminated employees entitled to but not yet receiving benefits 68
Vested and non-vested active participants 373
Total membership 1,326
Benefits Provided. Employees who retire with minimum age and years of service requirements are entitled
to annual retirement benefits, payable in monthly installments for life, in an amount equal to a percentage
of their final average compensation times years of credited service. Final average compensation is defined
as the average of the highest annual compensation paid over 2 consecutive years of credited service within
the last 10 years of credited service immediately preceding a member's termination of employment. The
benefit payments are calculated using the following rates for the various groups of general employees:
Bargaining Unit/Employee Multiplier
Group Percentage
United Auto Workers (UAW):
Hired after January 18, 2013 1.70%
All others 2.75%
Teamsters Local 214:
Hired after September 2012 1.25%
All others 1.80%
Teamsters Local 580:
Hired after May 2014 1.25%
All others 1.80%
Non-bargaining and all others 1.60%
96
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Contributions. The contribution requirements of Plan members are established and may be amended by the
City Council in accordance with City policies, union contracts, and Plan provisions. Employees are required
to make contributions to the Plan in rates from 3.00 to 6.50 percent depending on bargaining unit and hire
date. The City is required to contribute at actuarially determined rates expressed as a percentage of
covered payroll. The City's contribution rate for the plan for the year ended December 31, 2013 was 43.5
percent of projected valuation payroll.
Bargaining Unit/Employee Contribution
Group Percentage
United Auto Workers (UAW) 3.00%
Teamsters Local 214:
Hired after September 2012 5.00%
All others 6.50%
Teamsters Local 580:
Hired after May 2014 5.00%
All others 6.35%
District court Teamsters and exempt:
Hired after April 2014 5.00%
All others 5.50%
All others 6.50%
Investment Policy. The plan's policy in regard to the allocation of invested assets is established and may be
amended by the Board of Trustees. The investment policy has been formulated based on consideration of a
wide range of policies and describes the prudent investment process that the Board deems appropriate. The
Plan's asset allocation policy is shown on the following pages.
Rate of Return. For the year ended June 30, 2014, the annual money-weighted rate of return on pension
plan investments, net of pension plan investment expense, was 12.7 percent. The money-weighted rate of
return expresses investment performance, net of investment expense, adjusted for the changing amounts
actually invested.
Concentrations. At June 30, 2014, the Plan held certain investments (other than those issued or explicitly
guaranteed by the U.S. government, mutual funds, external investment pools, or other pooled investments)
in certain organizations that represent 5 percent or more of the Plan's fiduciary net position. Please see
Note 4 for the details of these concentrations.
97
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Reserves. In accordance with the Plan policy, the City establishes reserves for various purposes. The
reserves are adjusted annually based on recommendations from the City's actuaries. The policy for creating
and adjusting reserves was established and can be amended by the Plan Board of Trustees. A summary of
the Plan reserves at June 30, 2014 is as follows:
Reserve/Group Balance
Employee savings fund $ 29,631,080
Retirement reserve fund 146,374,121
Pension accumulation fund (8,011,319)
Members benefit fund 17,124,778
Health insurance fund 20,414,547
Net Pension Liability. The components of the net pension liability for the employees' retirement system at
June 30, 2014 were as follows:
Total pension liability $ 323,057,486
Plan fiduciary net position 185,118,660
Net pension liability $ 137,938,826
Plan fiduciary net position as
percentage of total pension
liability 57.30%
Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of June 30,
2014, using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation 3.10%
Salary increases 3.10%, plus service based increases
Investment rate of return 7.60%, net of investment expense and including
inflation
98
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Mortality is based on the RP-2000 tables (with Blue Collar adjustments for Police and Fire) for males and
females. For Disabled members, the disabled versions of these tables are used with a 5 year age setback for
males. Each of these tables is projected to 2008 using Scale BB. Future improvements in mortality for non-
disabled members are anticipated by projecting these tables an additional 15 years using 50% of Scale BB.
The actuarial assumptions used in the June 30, 2014 valuation were based on the results of actuarial
experience analysis conducted in 2012. The next assumption review is scheduled for 2016.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimates of expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each asset class. These ranges are combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation. This is then modified through a Monte-
Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline expected
return. Best estimates of arithmetic real rates of return for each major asset class included in the pension
plan's target asset allocation as of June 30, 2014, and the final investment return assumption, are
summarized in the following table:
Long-term Money-
Target Expected Real Weighted Rate
Asset Class Allocation Rate of Return of Return
Domestic equity 47.00% 5.80% 2.73%
International equity 18.00% 6.19% 1.11%
Fixed income 29.00% 2.30% 0.67%
Real estate 5.00% 4.20% 0.21%
Cash 1.00% 1.00% 0.01%
100.00% 4.73%
Inflation 3.10%
Risk adjustments -0.23%
Investment rate of return 7.60%
Discount Rate. The discount rate used to measure the total pension liability was 7.35%. The projection of
cash flows used to determine the discount rate assumed that plan member contributions will be made at
the current contribution rate and that City contributions will be made at rates equal to the difference
between actuarially determined contribution rates and the member rate. Based on those assumptions, the
pension plan's fiduciary net position was projected to be exhausted in the year 2056. Therefore, the
discount rate represents the single equivalent rate resulting from discounting at the long-term expected
rate of return until 2056, and discounting with the 20-year AA municipal bond index rate of 3.75%
thereafter. This projection is done on a closed group basis, per GASB requirements. On an ongoing, open-
group basis, it is unlikely that the funds will be depleted because funding progress is frequently reviewed
and adjustments are made to contribution levels.
99
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net
pension liability of the City, calculated using the discount rate of 7.35 percent, as well as what the City's
net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower
(6.35 percent) or 1-percentage point higher (8.35 percent) than the current rate:
One Percent Current One Percent
Decrease Discount Rate Increase
(6.35%) (7.35%) (8.35%)
Net pension liability $ 173,151,593 $ 137,938,826 $ 106,099,006
Employer Contributions. During the year ended June 30, 2014, total contributions of $9,361,009 were made
in accordance with actuarially determined requirements, computed through an actuarial valuation
performed as of June 30, 2012.
Net Pension Obligation. The City's annual net pension cost (expense) is calculated based on the annual
required contribution of the employer (ARC). The ARC represents a level of funding that, if paid on an
ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities
(or funding excess) over a period not to exceed thirty years. The following table shows the components of
the Plan's annual net pension cost for the year, the amount actually contributed to the Plan, and changes in
the net pension obligation:
Annual required contribution $ 9,361,000
Interest on net pension obligation 4,873
Adjustment to annual required contribution (4,089)
Net pension cost (expense) 9,361,784
Contributions made (9,361,009)
Increase in net pension obligation 775
Net pension obligation, beginning of year 64,115
Net pension obligation, end of year $ 64,890
Employer contributions to the Plan for the current fiscal year and two years prior were as follows:
Three-Year Trend Information
Annual Net Pension
Years Ended Pension Cost Percentage (Asset)
June 30, (APC) Contributed Obligation
2012 $ 7,596,622 99% $ 62,909
2013 8,587,742 100% 64,115
2014 9,361,784 100% 64,890
100
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
(1) The FY 2012 City contribution was reduced by $73,345 in recognition of additional contributions by
International United Auto Workers (UAW) employees, which were negotiated and contributed after the
establishment of the June 30, 2012 ARC from the December 31, 2010 valuation.
The schedule of employer contributions, presented as required supplementary information (RSI) following
the notes to the financial statements, presents trend information about the amounts contributed to the
plan by employers in comparison to the ARC, an amount that is actuarially determined in accordance with
the parameters of GASB Statement No. 50. The ARC represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal cost for each year and amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years.
Poiice and Fire Retirement System
Plan Description. The City sponsors and administers the Police and Fire Retirement System (the "Plan"), a
single-employer, defined benefit pension plan that covers all police officers and fire fighters who are full-
time employees of the City. The Plan was established and may be amended by the City Council and is
administered by an 8-member Board of Trustees. The Board is comprised of The Mayor of the City, one
member of the City Council appointed by the City Council, a resident of the City who shall be appointed by
the Mayor, by and with the consent of Council, two members each of the police and fire departments, to be
elected by all the members of their respective departments. It is accounted for as a separate pension trust
fund. Separate financial statements are not issued for the Plan.
Members may retire at age 55, or at any age with 25 or more years of credited service. Members are
vested after completing 10 years of credited service. Members are required to retire at age 60 (Police) or
70 (Fire). When an employee who had retired subsequent to August 31, 1966, dies, the plan provides for an
automatic pension to the retiree's spouse. This automatic pension is equal to 50% of the regular retirement
benefit the employee had been receiving at time of death. Effective July 30, 1990, members may elect a
reduced benefit, either 93% or 86% of the regular benefit, thereby increasing the spouse pension to 75% or
86% of the regular benefit, respectively. Alternately, members may elect a non-spousal beneficiary option.
The plan provides death and disability benefits. If a member leaves employment or dies before vesting,
accumulated member contributions plus interest are refunded to the member or designated beneficiary.
Members who are vested and terminate their employment have the option of deferred retirement benefits
until age 55 or withdrawing their contribution, thereby forfeiting any future benefits.
Summary of Significant Accounting Policies. The financial statements of the Plan are prepared using the
accrual basis of accounting. Plan member contributions are recognized in the period which the
contributions are due. The City's contributions are recognized when due and a formal commitment to
provide the contribution has been made. Benefits and refunds are recognized when due and payable in
accordance with the terms of the Plan. Administration of the Plan is funded through the Plan's investment
earnings.
Method Used to Value Investments. Plan investments are reported at fair value. Short-term investments are
reported at cost, which approximates fair value. Securities traded on a national or international exchange
are valued at the last reported sales price at current exchange rates. Investments for which market
quotations are not readily available are valued at their fair values as determined by the custodian under
the direction of the Plan Board of Trustees, with the assistance of a valuation service.
101
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Plan Membership. At June 30, 2014, plan membership consisted of the following:
Retirees and beneficiaries currently receiving benefits 699
Terminated employees entitled to but not yet receiving benefits 38
Vested and non-vested active participants 352
Total membership 1,089
Benefits Provided. Annual retirement allowances are determined by multiplying final average
compensation by 3.2% for the first 25 years of credited service. The maximum allowance is 80% of final
average compensation. Final average compensation is the member's highest wages for 2 consecutive years.
Contributions. The contribution requirements of Plan members are established and may be amended by the
City Council in accordance with City policies, union contracts, and Plan provisions. Fire members are
required to contribute 9.08 percent of their annual wages to the plan. Police supervisors are required to
contribute 9.52 percent and police non-supervisors, 8.50 percent. Chapter 294 of the City of Lansing's
Ordinance establishes benefit provisions and requires that the portion of the annuity and pension reserves
(which are determined annually by the City's actuary) not financed by member contributions shall be
financed by annual appropriations. The City's contribution rate for the plan for the year ended June 30,
2014 was 42.6 percent of projected valuation payroll.
Investment Policy. The plan's policy in regard to the allocation of invested assets is established and may be
amended by the Board of Trustees. The investment policy has been formulated based on consideration of a
wide range of policies and describes the prudent investment process that the Board deems appropriate. The
Plan's asset allocation policy is shown on the following pages.
Rate of Return. For the year ended June 30, 2014, the annual money-weighted rate of return on pension
plan investments, net of pension plan investment expense, was 10.1 percent. The money-weighted rate of
return expresses investment performance, net of investment expense, adjusted for the changing amounts
actually invested.
Concentrations. At June 30, 2014, the Plan held certain investments (other than those issued or explicitly
guaranteed by the U.S. government, mutual funds, external investment pools, or other pooled investments)
in certain organizations that represent 5 percent or more of the Plan's fiduciary net position. Please see
Note 4 for the details of these concentrations.
Reserves. In accordance with the Plan policy, the City establishes reserves for various purposes. The
reserves are adjusted annually based on recommendations from the City's actuaries. The policy for creating
and adjusting reserves was established and can be amended by the Plan Board of Trustees. A summary of
the Plan reserves at June 30, 2014 is as follows:
Reserve/Group Balance
Retirement reserve fund $ 300,473,516
Health insurance fund 23,437,214
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CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Net Pension Liability. The components of the net pension liability for the police and fire retirement system
at June 30, 2014, were as follows:
Total pension liability $ 389,416,813
Plan fiduciary net position 300,473,516
Net pension liability $ 88,943,297
Plan fiduciary net position as
percentage of total pension
liability 77.16%
Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of June 30,
2014, using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation 3.10%
Salary increases 3.10%, plus service based increases
Investment rate of return 7.60%, net of investment expense and including
inflation
Mortality is based on the RP-2000 tables (with Blue Collar adjustments for Police and Fire) for males and
females. For Disabled members, the disabled versions of these tables are used with a 5 year age setback for
males. Each of these tables is projected to 2008 using Scale BB. Future improvements in mortality for non-
disabled members are anticipated by projecting these tables an additional 15 years using 50% of Scale BB.
The actuarial assumptions used in the June 30, 2014 valuation were based on the results of actuarial
experience analysis conducted in 2012. The next assumption review is scheduled for 2016.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best-estimates of expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each asset class. These ranges are combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation. This is then modified through a Monte-
Carlo simulation process, by which a (downward) risk adjustment is applied to the baseline expected
return. Best estimates of arithmetic real rates of return for each major asset class included in the pension
plan's target asset allocation as of June 30, 2014, and the final investment return assumption, are
summarized in the following table:
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CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Long-term Money-
Target Expected Real Weighted Rate
Asset Class Allocation Rate of Return of Return
Domestic equity 47.00% 5.80% 2.73%
International equity 18.00% 6.19% 1.11%
Fixed income 29.00% 2.30% 0.67%
Real estate 5.00% 4.20% 0.21%
Cash 1.00% 1.00% 0.01%
100.00% 4.73%
Inflation 3.10%
Risk adjustments -0.23%
Investment rate of return 7.60%
Discount Rate. The discount rate used to measure the total pension liability was 7.57%. The projection of
cash flows used to determine the discount rate assumed that plan member contributions will be made at
the current contribution rate and that City contributions will be made at rates equal to the difference
between actuarially determined contribution rates and the member rate. Based on those assumptions, the
pension plan's fiduciary net position was projected to be exhausted in the year 2072. Therefore, the
discount rate represents the single equivalent rate resulting from discounting at the long-term expected
rate of return until 2070, and discounting with the 20-year AA municipal bond index rate of 3.75%
thereafter. This projection is done on a closed group basis, per GASB requirements. On an ongoing, open-
group basis, it is unlikely that the funds will be depleted because funding progress is frequently reviewed
and adjustments are made to contribution levels.
Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net
pension liability of the City, calculated using the discount rate of 7.57 percent, as well as what the City's
net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower
(6.57 percent) or 1-percentage point higher (8.57 percent) than the current rate:
One Percent Current One Percent
Decrease Discount Rate Increase
(6.57%) (7.57%) (8.57%)
Net pension liability $ 127,496,909 $ 88,943,297 $ 48,101,183
Employer Contributions. During the year ended June 30, 2014, total contributions of $11,248,857 were
made in accordance with actuarially determined requirements, computed through an actuarial valuation
performed as of June 30, 2012.
Net Pension Obligation. The City's annual net pension cost (expense) is calculated based on the annual
required contribution of the employer (ARC). The ARC represents a level of funding that, if paid on an
ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities
(or funding excess) over a period not to exceed thirty years. The following table shows the components of
the Plan's annual net pension cost for the year, the amount actually contributed to the Plan, and changes in
the net pension obligation:
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CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Annual required contribution $ 11,248,857
Interest on net pension obligation 13,605
Adjustment to annual required contribution (11,415)
Net pension cost (expense) 11,251,047
Contributions made (11,248,857)
Increase in net pension obligation 2,190
Net pension obligation, beginning of year 179,013
Net pension obligation, end of year $ 181,203
Employer contributions to the Plan for the current fiscal year and two years prior were as follows:
Three-Year Trend Information
Annual Net Pension
Years Ended Pension Cost Percentage (Asset)
June 30, (APC) Contributed Obligation
2012 $ 9,241,957 98% $ 175,646
2013 10,136,966 100% 179,013
2014 11,251,047 100% 181,203
(1) The FY 2012 City contribution was reduced by $185,093 in recognition of additional contributions by
International Association of Firefighters (IAFF) employees, which were negotiated and contributed after the
establishment of the June 30, 2012 ARC from the December 31, 2010 valuation.
The schedule of employer contributions, presented as required supplementary information (RSI) following
the notes to the financial statements, presents trend information about the amounts contributed to the
plan by employers in comparison to the ARC, an amount that is actuarially determined in accordance with
the parameters of GASB Statement No. 50. The ARC represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal cost for each year and amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years.
105
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Financial statements for individual pension and employee benefit plans:
Pension and Other Postemployment Benefits Net Position .
Employees' Employees' Police Police Employees'
Retirement Retirement and Fire and Fire Money Retiree
System System Retirement Retirement Purchase Health Care
Pension OPEB System System OPEB Pension Plan VEBA Totals
Assets
Cash and cash equivalents $ 19,982,273 $ - $ 26,695,745 $ - $ $ $ 46,678,018
Investments:
Money market funds 2,102,607 250,268 2,317,922 194,871 4,865,668
Government obligations 21,933,213 2,610,652 27,864,968 2,342,645 1,955,526 19,089,954 75,796,958
Corporate bonds 22,924,615 2,728,656 31,250,185 2,627,245 - - 59,530,701
Common stocks 49,634,397 5,907,851 80,996,763 6,809,505 143,348,516
Mutualfunds 74,916,563 8,917,120 136,347,889 11,462,948 231,644,520
Contribution receivable 1,854 - 3,668 - 1,209 - 6,731
Dividends and interest receivable 221,546 - 270,958 - 128,059 620,563
Total assets 191,717,068 20,414,547 305,748,098 23,437,214 1,956,735 19,218,013 562,491,675
Liabilities
Accounts payable 6,598,408 - 5,274,582 - - - 11,872,990
Net position restricted for
Pension benefits 185,118,660 - 300,473,516 - 1,956,735 - 487,548,911
Other postern ployment benefits 20,414,547 - 23,437,214 - 19,218,013 63,069,774
Total net position $ 185,118,660 $ 20,414,547 $ 300,473,516 $ 23,437,214 $ 1,956,735 $ 19,218,013 $ 550,618,685
106
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Changes in Pension and Other Postemployment Benefits Net Position
Employees' Employees' Police Police Employees'
Retirement Retirement and Fire and Fire Money Retiree
System System Retirement Retirement Purchase Health Care
Pension OPEB System System OPEB Pension Plan VEBA Totals
Additions
Investment income:
Net appreciation
in fair value of investments $ 16,146,577 $ 2,811,623 $ 31,629,973 $ 3,054,556 $ $ $ 53,642,729
Interest income 1,060,804 - 1,290,464 - 257,135 2,266,611 4,875,014
Dividend income 680,254 1,096,184 - - 1,776,438
Investment expenses - - - (5,660) - (5,660)
Net investment income 17,887,635 2,811,623 34,016,621 3,054,556 251,475 2,266,611 60,288,521
Contributions:
Employer 9,361,009 11,048,992 11,248,857 11,198,633 20,176 750,000 43,627,667
Plan members 1,290,678 - 2,911,896 - 3,494 - 4,206,068
Total contributions 10,651,687 11,048,992 14,160,753 11,198,633 23,670 750,000 47,833,735
Total additions 28,539,322 13,860,615 48,177,374 14,253,189 275,145 3,016,611 108,122,256
Deductions
Participant benefits 22,957,379 10,638,992 26,852,038 10,258,633 20,757 - 70,727,799
Administrative expense 741,037 - 1,141,506 - - 1,882,543
Total deductions 23,698,416 10,638,992 27,993,544 10,258,633 20,757 72,610,342
Change in net position 4,840,906 3,221,623 20,183,830 3,994,556 254,388 3,016,611 35,511,914
Net position restricted
for pension and other
postemployment benefits:
Beginning of year 180,277,754 17,192,924 280,289,686 19,442,658 1,702,347 16,201,402 515,106,771
End of year $185,118,660 $ 20,414,547 $300,473,516 $ 23,437,214 $ 1,956,735 $ 19,218,013 $550,618,685
107
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
17. OTHER POSTEMPLOYMENT BENEFITS
Primary Government
Plan Description. The City of Lansing contributes to the Employees' Retirement System, the Police and
Fire Retirement System, and the Voluntary Employees Beneficiary Association amounts to pre-fund
postemployment healthcare. In the Employees' Retirement System and the Police and Fire Retirement
System, these other postemployment benefits (OPEB) are set up as reserves in the pension plans, and their
investments are commingled with the investments of the pension plan. Portfolio makeup is reported as a
percentage of total pension plan assets. Earnings are calculated based on a seven year smoothed rate of
return of the retirement systems. Eligible participants include any retirees who receive pension benefits
under their respective pension plans, with the exception of Teamster 580 employees hired after May,
2014. OPEB plan provisions are established and may be amended by the City Council, subject to the City's
various collective bargaining agreements. Separate financial statements are not prepared for the plans.
Basis of Accounting. The Plans' financial statements are prepared using the accrual basis of accounting.
Plan member contributions are recognized in the period in which the contributions are due. Employer
contributions are recognized when due and the employer has made a formal commitment to provide the
contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of
the plans.
Method Used to Value Investments. Plan investments are reported at fair value. Securities traded on a
national or international exchange are valued at the last reported sales price at current exchange rates.
Investments for which market quotations are not readily available are valued at their fair values as
determined by the custodian under the direction of each plans' board of trustees, with the assistance of a
valuation service.
Voluntary Employment Beneficiary Association(VEBV
The City of Lansing Voluntary Employees Beneficiary Association (the "Plan") is a single-employer defined
benefit post employment healthcare plan established by the City to provide medical and healthcare
benefits for retirees and their beneficiaries. Eligible participants include any retirees who receive pension
benefits under one of the City's pension plans. The Plan is funded by a trust agreement established
pursuant to Section 501(c)(9) of the Internal Revenue Code that allows for the formation of a VEBA. During
the year, the City contributed $750,000 to the Plan.
Employees'Retirement System
The City provides postemployment health care benefits, in accordance with labor agreements, to full-time
employees of the City and employees of the 54-A District Court (not including police officers and
firefighters who are members of the Police and Fire Retirement System). Members eligible for pension
benefits under the Employees' Retirement System are also eligible to receive health care benefits, with
the exception of Teamster 580 employees hired after May, 2014. The City provides the full cost of health
benefits to retirees, payable to health care vendors, and also reimburses retirees eligible for Medicare
benefits of $96.40 per month for each covered retiree and eligible dependent(s) eligible for retiree
healthcare. The payments are charged to the fringe benefit internal service fund of the City and are
recognized as expenses as payments are made.
108
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Membership of the Plan consisted of the following at December 31, 2011, the date of the most recent
actuarial valuation:
Retirees and beneficiaries receiving benefits 675
Terminated plan members entitled to but
not yet receiving benefits 65
Active plan members 481
Total 1,221
During the year, the City contributed $11,048,992 (direct benefit payments of $10,638,992 and City
contributions of$410,000) to the Plan.
Annual required contribution $ 14,040,043
Interest on net OPEB obligation 170,506
Adjustment to annual required contribution (152,930)
Net OPEB cost (expense) 14,057,619
Contributions made (11,048,992)
Increase in net OPEB obligation 3,008,627
Net OPEB obligation, beginning of year 3,965,258
Net OPEB obligation, end of year $ 6,973,885
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net
OPEB obligation for the current year and the two preceding years were as follows:
Three-Year Trend Information
Percentage
of Annual
Annual OPEB OPEB Cost Net OPEB
Year Ended Cost Contributed Obligation
2012 $ 14,915,958 69.5% $ 1,337,371
2013 12,775,667 79.4% 3,965,258
2014 14,057,619 78.6% 6,973,885
The schedule of employer contributions, presented as required supplementary information (RSI) following
the notes to the financial statements, presents trend information about the amounts contributed to the
plan by employers in comparison to the ARC, an amount that is actuarially determined in accordance with
the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal cost for each year and amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years.
109
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Funded Status and Funding Progress. As of December 31, 2011, the most recent actuarial valuation date,
the Plan was 12.6 percent funded. The actuarial accrued liability for benefits was $226,915,143, and the
actuarial value of assets was $28,680,151, resulting in an unfunded actuarial accrued liability (UAAL) of
$198,234,992. The covered payroll (annual payroll of active employees covered by the Plan) was
$24,813,423, and the ratio of the UAAL to the covered payroll was 798.9 percent. The Employees'
Retirement System and VEBA were combined in the actuarial valuation.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined
regarding the funded status of the plan and the annual required contributions of the employer are subject
to continual revision as actual results are compared with past expectations and new estimates are made
about the future. The schedule of funding progress, presented as required supplementary information
following the notes to the financial statements, presents multiyear trend information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued
liabilities for benefits.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on
the substantive plan (the plan as understood by the employer and the plan members) and include the types
of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The actuarial methods and assumptions used
include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued
liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
In the December 31, 2011 actuarial valuation, the entry age actuarial cost method was used. The actuarial
assumptions included a 4.3 percent investment rate of return (net of administrative expenses), which
includes a 3.3 percent inflation assumption. The actuarial value of assets was determined using techniques
that spread the effects of short-term volatility in the market value of investments over a five-year period.
The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining
amortization period at December 31, 2011, was thirty years.
Poiice and Fire Retirement System
The City also provides postemployment health care benefits, in accordance with labor agreements, to
members who are eligible to receive pension benefits under the Police and Fire Retirement System. The
City provides the full cost of health benefits to retirees, payable to health care vendors, and also
reimburses retirees eligible for Medicare benefits of $104.90 per month for each covered retiree and
dependent(s). The payments are charged to the fringe benefit internal service fund of the City and are
recognized as expenses as payments are made.
110
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Membership of the Plan consisted of the following at December 31, 2011, the date of the most recent
actuarial valuation:
Retirees and beneficiaries receiving benefits 478
Terminated plan members entitled to but
not yet receiving benefits 16
Active plan members 362
Total 856
During the year, the City contributed $11,198,633 (direct benefit payments of $10,258,633 and City
contributions of $940,000) to the Plan.
Annual required contribution $ 16,852,426
Interest on net OPEB obligation 1,455,249
Adjustment to annual required contribution (1,362,139)
Net OPEB cost (expense) 16,945,536
Contributions made (11,198,633)
Increase in net OPEB obligation 5,746,903
Net OPEB obligation, beginning of year 33,843,009
Net OPEB obligation, end of year $ 39,589,912
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net
OPEB obligation for the current year and the two preceding years were as follows:
Three-Year Trend Information
Percentage
of Annual
Annual OPEB OPEB Cost Net OPEB
Year Ended Cost Contributed Obligation
2012 $ 17,844,115 55.4% $ 27,523,519
2013 17,489,692 63.9% 33,843,009
2014 16,945,536 66.1% 39,589,912
The schedule of employer contributions, presented as required supplementary information (RSI) following
the notes to the financial statements, presents trend information about the amounts contributed to the
plan by employers in comparison to the ARC, an amount that is actuarially determined in accordance with
the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal cost for each year and amortize any unfunded actuarial liabilities (or
funding excess) over a period not to exceed thirty years.
111
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
Funded Status and Funding Progress. As of December 31, 2011, the most recent actuarial valuation date,
the Plan was 7.4 percent funded. The actuarial accrued liability for benefits was $252,220,445, and the
actuarial value of assets was $18,678,699, resulting in an unfunded actuarial accrued liability (UAAL) of
$233,541,746. The covered payroll (annual payroll of active employees covered by the Plan) was
$25,128,835, and the ratio of the UAAL to the covered payroll was 929.4 percent.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined
regarding the funded status of the plan and the annual required contributions of the employer are subject
to continual revision as actual results are compared with past expectations and new estimates are made
about the future. The schedule of funding progress, presented as required supplementary information
following the notes to the financial statements, presents multiyear trend information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued
liabilities for benefits.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on
the substantive plan (the plan as understood by the employer and the plan members) and include the types
of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The actuarial methods and assumptions used
include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued
liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
In the December 31, 2011 actuarial valuation, the entry age actuarial cost method was used. The actuarial
assumptions included a 4.3 percent investment rate of return (net of administrative expenses), which
includes a 3.0 percent inflation assumption. The actuarial value of assets was determined using techniques
that spread the effects of short-term volatility in the market value of investments over a five-year period.
The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining
amortization period at December 31, 2011, was thirty years.
18. OPERATING LEASE
During fiscal year 2014, the City entered into an operating lease with the Lansing School District (the
"District"), for approximately 86,900 square feet of the Hill Center for Academics and Technology for the
purpose of operating a police precinct. The term of the lease runs through June 30, 2018. The City is
required to make approximately $800,000 worth of improvements to the leased space, the cost of which
will be capitalized by the District. In addition, beginning July 1, 2016, rent payments will be made to the
District by the City in monthly installments of $2,083 ($25,000 annually) and $10,417 ($125,000 annually)
for the years ended June 1, 2017 and 2018, respectively.
112
CITY OF LANSING, MICHIGAN
Notes to Financial Statements
19. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT
The City adopted the provisions of GASB Statement No. 65 (GASB 65), Items Previously Reported as Assets
and Liabilities, in the current year. In addition to the revised classification of certain financial elements
in the financial statements, the implementation of GASB 65 resulted in the elimination of bond issuance
costs as an asset. As a result of this change, beginning net position in various funds and activities
decreased by the following amounts:
Amount of
Opinion Unit Decrease
Governmental Activities $ 160,441
Business-type Activities:
Sewer Disposal System 524,852
Municipal Parking System 396,641
Nonmajor Enterprise Funds 3,292
Total business-type activities 924,785
Component Unit:
Tax Increment Finance Authority 143,468
$ 1,228,694
20. SUBSEQUENT EVENTS
On July 9, 2014, the City issued $2,360,000 of Limited Tax General Obligation bonds for sanitary sewer
system improvements. Payments are to be made semi-annually over a 20 year period, beginning on April
1, 2016. Interest is charged on the outstanding balance at 2.50 percent.
On August 7, 2014, the City issued $2,275,000 of capital improvement bonds. Payments are to be made
semi-annually over a 3 year period, beginning on May 1, 2015. Interest is charged on the outstanding
balance at rates that vary from 1.25 to 2.00 percent.
On September 30, 2014, the City signed an installment purchase agreement for the purchase of police
vehicles for a total of $491,241. Payments are to be made semi-annually over a 3 year period, beginning on
April 1, 2015. The agreement includes interest at a rate of 1.44 percent.
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114
REQUIRED SUPPLEMENTARY INFORMATION
115
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Single-employer Defined Benefit Pension Plan
Employees' Retirement System
Schedules of Changes in Net Pension Liability and Related Ratios
Fiscal Year
Ending
June 30, 2014
Total pension liability
Service cost $ 2,982,624
Interest on total pension liability 22,722,630
Benefit changes -
Difference between expected and actual experience
Assumption changes
Benefit payments, including refunds (22,790,522)
Net change in total pension liability 2,914,732
Total pension liability, beginning of year 320,142,754
Total pension liability, end of year $ 323,057,486
Plan fiduciary net position
Employer contributions $ 9,361,009
Employee contributions 1,290,678
Pension plan net investment income 17,887,635
Benefit payments (22,957,379)
Refunds
Pension plan administrative expense (741,037)
Other -
Net change in plan fiduciary net position 4,840,906
Plan fiduciary net position, beginning of year 180,277,754
Plan fiduciary net position, end of year $ 185,118,660
Net pension liability $ 137,938,826
Plan fiduciary net position as a percentage
of total pension liability 57.3%
Covered employee payroll $ 20,874,143
Net pension liability as a percentage
of covered employee payroll 660.81
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years
of data will be presented.
116
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Single-employer Defined Benefit Pension Plan
Employees' Retirement System
Schedule of the Net Pension Liability
Plan Net
Position as Net Pension
Fiscal Year Percentage of Liability as
Ending Total Pension Plan Net Net Pension Total Pension Covered Percentage of
June 30, Liability Position Liability Liability Payroll Covered Payroll
2014 $323,057,486 $185,118,660 $137,938,826 57.3% $ 20,874,143 660.81%
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years
of data will be presented.
117
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Single-employer Defined Benefit Pension Plan
Employees' Retirement System
Schedule of Contributions
Actual
Contribution
Fiscal Year Actuarially Contribution as Percentage
Ending Determined Actual Deficiency Covered of Covered
June 30, Contribution* Contribution (Excess)* Payroll Payroll
2005 $ 4,675,000 $ 4,675,000 $ $ 30,851,000 15.2%
2006 4,900,000 4,900,000 31,944,000 15.3%
2007 5,231,000 5,231,000 31,797,000 16.5%
2008 6,022,000 6,022,000 29,688,000 20.3%
2009 6,048,000 6,477,000 429,000 30,602,000 21.2%
2010 6,472,349 6,043,861 (428,488) 27,766,628 21.8%
2011 7,297,083 7,297,083 - 26,068,735 28.0%
2012 7,596,879 7,523,534 (73,345) 22,838,598 32.9%
2013 8,586,536 8,586,536 20,874,143 41.1%
2014 9,361,009 9,361,009 21,521,242 43.5%
* The City contributed in excess of its FY 2009 Actuarially Determined Employer Contribution (ADEC). The City's FY
2010 contribution was reduced by the dollar amount of the FY 2009 overpayment. The FY 2012 City contribution
was reduced by$73,345 in recognition of additional contributions by United Auto Workers (UAW)employees, which
were negotiated and contributed after the establishment of the June 30, 2012 ADEC from the December 31, 2010
valuation.
The actuarially determined contribution was based on projected covered payroll. Employer contributions were
made in full based on actual covered payroll. Accordingly, the actuarially-determined contribution has been
expressed above as a percentage of actual payroll.
Notes to Schedule of Contributions
Valuation Date December 31, 2013 (rolled forward to June 30, 2014)
Notes Actuarially determined contribution rates are calculated as of June 30, which is 12
months prior to the beginning of the fiscal year in which contributions are reported.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry-age normal
Amortization method Level percent of payroll, closed
Remaining amortization
period 28 years
Asset valuation method Open; 5-year smooth market
Inflation 3.10%
Salary increases 3.10% plus service based increases
Investment rate of return 7.60%
Retirement age Age-based table of rates that are specific to the type of eligibility condition. Last
updated for the December 31, 2011 valuation. The next study is scheduled for
Mortality RP2000 Combined Healthy Tables set back one year for females. For Disabled
members, the disabled version of these tables are assumed.
118
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Single-employer Defined Benefit Pension Plan
Employees' Retirement System
Schedule of Investment Returns
Fiscal Year
Ending Annual
June 30, Return(')
2014 12.70%
Annual money-weighted rate of return, net of investment expenses
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years
of data will be presented.
119
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Single-employer Defined Benefit Pension Plan
Police and Fire Retirement System
Schedules of Changes in Net Pension Liability and Related Ratios
Fiscal Year
Ending
June 30, 2014
Total pension liability
Service cost $ 6,614,784
Interest on total pension liability 27,896,927
Benefit changes -
Difference between expected and actual experience
Assumption changes
Benefit payments, including refunds (26,270,724)
Net change in total pension liability 8,240,987
Total pension liability, beginning of year 381,175,826
Total pension liability, end of year $ 389,416,813
Plan fiduciary net position
Employer contributions $ 11,248,857
Employee contributions 2,911,896
Pension plan net investment income 34,016,621
Benefit payments (26,852,038)
Refunds
Pension plan administrative expense (1,141,506)
Other -
Net change in plan fiduciary net position 20,183,830
Plan fiduciary net position, beginning of year 280,289,686
Plan fiduciary net position, end of year $ 300,473,516
Net pension liability $ 88,943,297
Plan fiduciary net position as a percentage
of total pension liability 77.2%
Covered employee payroll $ 25,611,974
Net pension liability as a percentage
of covered employee payroll 347.27%
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years
of data will be presented.
120
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Single-employer Defined Benefit Pension Plan
Police and Fire Retirement System
Schedule of the Net Pension Liability
Plan Net
Position as Net Pension
Fiscal Year Percentage of Liability as
Ending Total Pension Plan Net Net Pension Total Pension Covered Percentage of
June 30, Liability Position Liability Liability Payroll Covered Payroll
2014 $389,416,813 $300,473,516 $ 88,943,297 77.2% $ 25,611,974 347.27%
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years
of data will be presented.
121
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Single-employer Defined Benefit Pension Plan
Police and Fire Retirement System
Schedule of Contributions
Actual
Contribution
Fiscal Year Actuarially Contribution as Percentage
Ending Determined Actual Deficiency Covered of Covered
June 30, Contribution* Contribution (Excess)* Payroll Payroll
2005 $ 3,333,869 $ 3,333,869 $ $ 27,855,000 12.0%
2006 4,658,703 4,658,703 29,582,000 15.7%
2007 5,385,960 5,385,960 29,600,000 18.2%
2008 6,520,974 6,520,974 30,161,000 21.6%
2009 6,094,397 6,483,000 388,603 30,443,000 21.3%
2010 7,179,360 6,790,757 (388,603) 28,536,056 23.8%
2011 8,240,688 8,240,688 - 25,128,835 32.8%
2012 9,242,173 9,057,080 (185,093) 26,121,411 34.7%
2013 10,133,599 10,133,599 25,636,626 39.5%
2014 11,248,857 11,248,857 26,405,725 42.6%
* The City contributed in excess of its FY 2009 Actuarially Determined Employer Contribution (ADEC). The City's FY
2010 contribution was reduced by the dollar amount of the FY 2009 overpayment. The FY 2012 City contribution
was reduced by $185,093 in recognition of additional contributions by International Association of Firefighters
(IAFF) employees, which were negotiated and contributed after the establishment of the June 30, 2012 ADEC from
the December 31, 2010 valuation.
The actuarially determined contribution was based on projected covered payroll. Employer contributions were
made in full based on actual covered payroll. Accordingly, the actuarially-determined contribution has been
expressed above as a percentage of actual payroll.
Notes to Schedule of Contributions
Valuation Date December 31, 2013 (rolled forward to June 30, 2014)
Notes Actuarially determined contribution rates are calculated as of June 30, which is 12
months prior to the beginning of the fiscal year in which contributions are reported.
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry-age normal
Amortization method Level percent of payroll, closed
Remaining amortization
period 28 years
Asset valuation method Open; 5-year smooth market
Inflation 3.10%
Salary increases 3.10% plus service based increases
Investment rate of return 7.60%
Retirement age Age-based table of rates that are specific to the type of eligibility condition. Last
updated for the December 31, 2011 valuation. The next study is scheduled for
Mortality RP2000 Combined Healthy Tables set back one year for females. For Disabled
members, the disabled version of these tables are assumed.
122
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Single-employer Defined Benefit Pension Plan
Police and Fire Retirement System
Schedule of Investment Returns
Fiscal Year
Ending Annual
June 30, Return(')
2014 10.60%
Annual money-weighted rate of return, net of investment expenses
Note: GASB 67 was implemented in fiscal year 2014. This schedule is being built prospectively. Ultimately, 10 years
of data will be presented.
123
CITY OF LANSING, MICHIGAN
Required Supplementary Information
Other Postemployment Benefit Plans
(amounts in thousands)
Employees' Retirement System and VEBA-Schedule of Funding Progress
Actuarial Actuarial UAAL as a
Actuarial Value of Accrued Underfunded Funded Covered %of Covered
Valuation Assets Liability AAL (UAAL) Ratio Payroll Payroll
Date (A) (B) (B-A) (A/B) (C) ((B-A)/C)
12/31/2006 $ 14,337 $ 147,388 $ 133,051 9.7% $ 31,944 416.5%
12/31/2009 24,364 203,400 179,036 12.0% 30,602 585.0%
12/31/2011 28,680 226,915 198,235 12.6% 24,813 798.9%
Police and Fire Retirement System -Schedule of Funding Progress
Actuarial Actuarial Underfunded UAAL as a
Actuarial Value of Accrued (Overfunded) Funded Covered %of Covered
Valuation Assets Liability AAL (UAAL) Ratio Payroll Payroll
Date (A) (B) (B-A) (A/B) (C) ((B-A)/C)
12/31/2006 $ 13,064 $ 155,559 $ 142,495 8.4% $ 29,582 481.7%
12/31/2009 17,477 214,899 197,422 8.1% 30,443 648.5%
12/31/2011 18,679 252,220 233,541 7.4% 25,129 929.4%
Employees' Retirement System and VEBA-Schedule of Employer Contributions
Annual
Required Percentage
Year Ended Contribution of ARC
June 30, (ARC) Contributed
2012 $ 14,981 69.2%
2013 12,770 79.5%
2014 14,040 78.7%
Police and Fire Retirement System-Schedule of Employer Contributions
Annual
Required Percentage
Year Ended Contribution of ARC
June 30, (ARC) Contributed
2012 $ 17,450 56.7%
2013 17,414 64.1
2014 16,852 66.5%
124
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES
125
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2014
Special Debt Capital
Revenue Service Projects Permanent Totals
Assets
Cash and cash equivalents $ 57,262 $ $ - $ - $ 57,262
Equity in pooled cash and investments 7,285,289 784,064 1,718,595 9,787,948
Accounts receivable, net 11,905 142,972 - 154,877
Special assessments receivable - 500,778 500,778
Loans receivable 1,432,342 - 1,432,342
Accrued interest receivable 2,147,867 - 2,147,867
Due from other funds - 4,055,000 4,055,000
Due from other governments 6,014,008 1,070 6,015,078
Inventories 833,380 - - 833,380
Total assets $ 17,782,053 $ $ 5,483,884 $ 1,718,595 $ 24,984,532
Liabilities
Accounts payable $ 1,852,918 $ $ 859,572 $ - $ 2,712,490
Deposits payable 47,028 - 47,028
Accrued payroll 32,981 32,981
Due to other funds 3,780,000 - 3,780,000
Advances from other funds - 362,224 362,224
Due to other governments 333,749 - 333,749
Unearned revenue 335,397 - 335,397
Total liabilities 6,382,073 1,221,796 7,603,869
Deferred inflows of resources
Unavailable revenue - loans receivable 3,380,209 - 3,380,209
Unavailable revenue - special
assessments - 444,596 444,596
Total deferred inflows of resources 3,380,209 444,596 - 3,824,805
Fund balances
Nonspendable 833,380 - 1,718,595 2,551,975
Restricted 6,719,503 183,425 - 6,902,928
Committed 666,888 3,956,224 4,623,112
Unassigned (deficit) (200,000) (322,157) - (522,157)
Total fund balances 8,019,771 3,817,492 1,718,595 13,555,858
Total liabilities, deferred inflows of
resources and fund balances $ 17,782,053 $ $ 5,483,884 $ 1,718,595 $ 24,984,532
126
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2014
Special Debt Capital
Revenue Service Projects Permanent Totals
Revenues
Taxes and special assessments $ 409,030 $ 498,289 $ 97,774 $ $ 1,005,093
Intergovernmental 26,622,203 - - 26,622,203
Charges for services 3,884,685 803,748 4,688,433
Fines and forfeits 422,795 - 422,795
Interest - 713 6,703 7,416
Contributions 10,000 - - 10,000
Otherrevenues 457,126 - - - 457,126
Total revenues 31,805,839 498,289 902,235 6,703 33,213,066
Expenditures
Current expenditures:
General government 2,913,725 - - - 2,913,725
Public safety 5,366,896 5,366,896
Public works 3,361,393 3,361,393
Highways and streets 10,496,880 10,496,880
Recreation and culture 716,235 716,235
Community development 3,646,035 - 3,646,035
Debt service:
Principal 1,372,809 650,000 2,022,809
Interest 606,914 139,888 - 746,802
Capital outlay 5,928,517 - 2,786,676 8,715,193
Total expenditures 34,409,404 789,888 2,786,676 - 37,985,968
Revenues over (under)
expenditures (2,603,565) (291,599) (1,884,441) 6,703 (4,772,902)
Other financing sources (uses)
Transfers in 6,982,691 291,421 2,847,400 15,650 10,137,162
Transfers out (1,812,535) - (1,525,410) (6,703) (3,344,648)
Proceeds on sale of capital assets 94,598 - 94,598
Issuance of long-term debt - - 986,300 - 986,300
Total other financing sources (uses) 5,264,754 291,421 2,308,290 8,947 7,873,412
Net change in fund balances 2,661,189 (178) 423,849 15,650 3,100,510
Fund balances, beginning of year 5,358,582 178 3,393,643 1,702,945 10,455,348
Fund balances, end of year $ 8,019,771 $ - $ 3,817,492 $ 1,718,595 $ 13,555,858
127
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128
CITY OF LANSING, MICHIGAN
Nonmajor Special Revenue Funds
Major Streets Fund - This fund accounts for revenues received from the State of Michigan for the
City's share of state gasoline and weight taxes, which is used for maintenance of major streets.
Local Streets Fund - This fund accounts for revenues received from the State of Michigan for the
City's share of state gasoline and weight taxes, which is used for maintenance of local streets.
Drug Law Enforcement Federal Fund - This fund accounts for federal revenues, from the
Departmens of Justice and Treasury, set aside for drug law enforcement under the provisions of
Federal Grant Agreements.
Drug Law Enforcement State and Local Fund - This fund accounts for state and local revenues,
from the Departmens of Justice and Treasury, set aside for drug law enforcement under the
provisions of State of Michigan Public Act 135 of 1985, as amended.
Community Development Block Grant Program Fund - This fund accounts for revenues received
from the Department of Housing and Urban Development. These revenues are restricted to
accomplishing the various objectives of Community Development Block Grant Programs, within
specific target areas.
Downtown Lansing, Inc. Fund - This fund accounts for assessments received from businesses
located in the district. The revenues are used for special events and maintenance of the district.
Building Department Fund - This fund accounts for revenues and expenditures resulting from the
enforcement of the State Construction Code Act of 1999 (PA 245 of 1999).
Parks Department Fund - This fund accounts for contributions and transfers which are restricted
for park expenditures.
The State and Federal Grants Fund - This fund accounts for all revenues received from
miscellaneous grants and local contributions. These revenues are used for projects as detailed in
individual grant applications.
Tri-County Metro Fund - This fund accounts for the operations of the Tri-County Metro Narcotics
Squad.
129
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2014
Drug Law Community
Drug Law Enforcement Development
Major Local Enforcement State and Block Grant
Streets Streets Federal Local Program
Assets
Cash and cash equivalents $ - $ - $ - $ 20,000 $ -
Equity in pooled cash and investments 2,571,869 2,110,793 97,931 350,578 49,604
Accounts receivable, net - - - 9,370 -
Loans receivable - 1,385,000
Accrued interest receivable - - 2,147,867
Due from other governments 1,125,690 312,945 849,374
Inventories 821,293 12,087 - - -
Total assets $ 4,518,852 $ 2,435,825 $ 97,931 $ 379,948 $ 4,431,845
Liabilities
Accounts payable $ 558,314 $ 82,521 $ 7,838 $ 80,334 $ 192,902
Deposits payable - - - - -
Accrued payroll 319 201 6,076
Due to other funds - 30,000 900,000
Due to other governments - -
Unearned revenue - - - - -
Total liabilities 558,633 112,722 7,838 80,334 1,098,978
Deferred inflows of resources
Unavailable revenue - loans receivable - - - - 3,332,867
Fund balances
Nonspendable 821,293 12,087 - - -
Restricted 3,138,926 2,311,016 90,093 299,614 -
Committed - - - - 200,000
Unassigned (deficit) - - - - (200,000)
Total fund balances 3,960,219 2,323,103 90,093 299,614 -
Total liabilities, deferred inflows of
resources and fund balances $ 4,518,852 $ 2,435,825 $ 97,931 $ 379,948 $ 4,431,845
130
State and
Downtown Building Parks Federal Tri-County
Lansing, Inc. Department Department Grants Metro Totals
$ - $ - $ - $ - $ 37,262 $ 57,262
17,613 181,907 466,888 372,972 1,065,134 7,285,289
- 2,535 - - - 11,905
- 47,342 1,432,342
- - 2,147,867
3,702,452 23,547 6,014,008
- - - - - 833,380
$ 17,613 $ 184,442 $ 466,888 $ 4,122,766 $ 1,125,943 $ 17,782,053
$ 1,883 $ 880 $ - $ 878,403 $ 49,843 $ 1,852,918
- - - 47,028 47,028
3,121 15,333 7,271 660 32,981
- - 2,850,000 - 3,780,000
- 333,749 333,749
- - 335,397 - 335,397
5,004 16,213 4,071,071 431,280 6,382,073
- - 47,342 - 3,380,209
- - - - 833,380
12,609 168,229 - 4,353 694,663 6,719,503
- - 466,888 - - 666,888
- - - - - (200,000)
12,609 168,229 466,888 4,353 694,663 8,019,771
$ 17,613 $ 184,442 $ 466,888 $ 4,122,766 $ 1,125,943 $ 17,782,053
131
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Special Revenue Funds
For the Year Ended June 30, 2014
Drug Law Community
Drug Law Enforcement Development
Major Local Enforcement State and Block Grant
Streets Streets Federal Local Program
Revenues
Taxes and special assessments $ - $ - $ - $ $
Intergovernmental 8,040,045 1,900,816 313,525 4,152,230
Charges for services 865,337 750,509 - - -
Fines and forfeits - - 226,551
Contributions - - - -
Otherrevenues 176,297 9,268 - - 87,294
Total revenues 9,081,679 2,660,593 313,525 226,551 4,239,524
Expenditures
Current expenditures:
General government - - - - -
Public safety 239,056
Public works - - -
Highways and streets 5,912,679 4,584,201
Recreation and culture - -
Community development - -
Debt service:
Principal 459,289 913,520
Interest 153,565 453,349 -
Capital outlay 1,395,762 293,231 - 4,239,524
Total expenditures 7,921,295 6,244,301 239,056 - 4,239,524
Revenues over (under)
expenditures 1,160,384 (3,583,708) 74,469 226,551 -
Other financing sources (uses)
Transfers in 681,652 5,653,200 15,624 -
Transfers out (1,791,000) - - (21,535)
Proceeds on sale of capital assets - - 94,598
Total other financing
sources (uses) (1,109,348) 5,653,200 15,624 73,063
Net change in fund balances 51,036 2,069,492 90,093 299,614
Fund balances, beginning of year 3,909,183 253,611 - -
Fund balances, end of year $ 3,960,219 $ 2,323,103 $ 90,093 $ 299,614 $
132
State and
Downtown Building Parks Federal Tri-County
Lansing, Inc. Department Department Grants Metro Totals
$ 409,030 $ $ $ - $ - $ 409,030
- 11,517,692 697,895 26,622,203
4,658 2,264,181 - - 3,884,685
- - 196,244 422,795
10,000 - - 10,000
178,314 - 5,953 - 457,126
602,002 2,264,181 11,523,645 894,139 31,805,839
663,723 2,096,552 153,450 - 2,913,725
- - 4,206,880 920,960 5,366,896
3,361,393 - 3,361,393
- 10,496,880
716,235 716,235
3,646,035 3,646,035
- 1,372,809
606,914
- - - - 5,928,517
663,723 2,096,552 12,083,993 920,960 34,409,404
(61,721) 167,629 (560,348) (26,821) (2,603,565)
60,470 - 550,210 21,535 6,982,691
- - - (1,812,535)
- - - 94,598
60,470 - 550,210 21,535 5,264,754
(1,251) 167,629 - (10,138) (5,286) 2,661,189
13,860 600 466,888 14,491 699,949 5,358,582
$ 12,609 $ 168,229 $ 466,888 $ 4,353 $ 694,663 $ 8,019,771
133
CITY OF LANSING, MICHIGAN
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2014
Major Streets
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Taxes and special assessments $ - $ - $ -
Intergovernmental 7,362,880 8,040,045 677,165
Charges for services 471,240 865,337 394,097
Fines and forfeits - - -
Contributions - - -
Otherrevenues 46,000 176,297 130,297
Total revenues 7,880,120 9,081,679 1,201,559
Expenditures
Current expenditures:
General government - - -
Public safety
Public works - -
Highways and streets 6,387,324 5,912,679 (474,645)
Recreation and culture - -
Community development - -
Debt service:
Principal 459,289 459,289
Interest 154,927 153,565 (1,362)
Capital outlay 3,663,415 1,395,762 (2,267,653)
Total expenditures 10,664,955 7,921,295 (2,743,660)
Revenues over (under) expenditures (2,784,835) 1,160,384 3,945,219
Other financing sources (uses)
Transfers in 1,441,540 681,652 (759,888)
Transfers out (1,791,000) (1,791,000)
Proceeds on sale of capital assets
Total other financing sources (uses) (349,460) (1,109,348) (759,888)
Net change in fund balances (3,134,295) 51,036 3,185,331
Fund balances, beginning of year 3,909,183 3,909,183 -
Fund balances (deficit), end of year $ 774,888 $ 3,960,219 $ 3,185,331
134
Local Streets Drug Law Enforcement Federal
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
1,900,580 1,900,816 236 100,000 313,525 213,525
365,000 750,509 385,509 - - -
- - - 240,000 (240,000)
- 9,268 9,268 -
2,265,580 2,660,593 395,013 340,000 313,525 (26,475)
274,500 239,056 (35,444)
5,105,251 4,584,201 (521,050)
913,520 913,520
456,829 453,349 (3,480)
1,773,857 293,231 (1,480,626) -
8,249,457 6,244,301 (2,005,156) 274,500 239,056 (35,444)
(5,983,877) (3,583,708) 2,400,169 65,500 74,469 8,969
5,653,200 5,653,200 - - 15,624 15,624
5,653,200 5,653,200 - - 15,624 15,624
(330,677) 2,069,492 2,400,169 65,500 90,093 24,593
253,611 253,611 - - - -
$ (77,066) $ 2,323,103 $ 2,400,169 $ 65,500 $ 90,093 $ 24,593
continued...
135
CITY OF LANSING, MICHIGAN
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2014
Drug Law Enforcement State and Local
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Taxes and special assessments $ $ $
Intergovernmental
Charges for services -
Fines and forfeits 119,400 226,551 107,151
Contributions - - -
Otherrevenues - - -
Total revenues 119,400 226,551 107,151
Expenditures
Current expenditures:
General government - - -
Public safety 50,000 (50,000)
Public works -
Highways and streets
Recreation and culture
Community development
Debt service:
Principal
Interest
Capital outlay -
Total expenditures 50,000 - (50,000)
Revenues over (under) expenditures 69,400 226,551 157,151
Other financing sources (uses)
Transfers in - - -
Transfers out (21,535) (21,535)
Proceeds on sale of capital assets 91,000 94,598 (3,598)
Total other financing sources (uses) 69,465 73,063 (3,598)
Net change in fund balances 138,865 299,614 153,553
Fund balances, beginning of year - - -
Fund balances (deficit), end of year $ 138,865 $ 299,614 $ 153,553
136
Community Development Block Grant Program Downtown Lansing, Inc.
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
$ $ $ $ 416,000 $ 409,030 $ (6,970)
5,241,943 4,152,230 (1,089,713) - - -
- - 4,800 4,658 (142)
- - - 10,000 10,000
68,653 87,294 18,641 205,580 178,314 (27,266)
5,310,596 4,239,524 (1,071,072) 636,380 602,002 (34,378)
- - 684,170 663,723 (20,447)
5,310,596 4,239,524 (1,071,072) -
5,310,596 4,239,524 (1,071,072) 684,170 663,723 (20,447)
- - (47,790) (61,721) (13,931)
60,470 60,470
60,470 60,470
12,680 (1,251) (13,931)
13,860 13,860
$ $ $ $ 26,540 $ 12,609 $ (13,931)
continued...
137
CITY OF LANSING, MICHIGAN
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2014
Building Department
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Taxes and special assessments $ $ $
Intergovernmental
Charges for services 2,182,300 2,264,181 81,881
Fines and forfeits - - -
Contributions
Otherrevenues - - -
Total revenues 2,182,300 2,264,181 81,881
Expenditures
Current expenditures:
General government 2,346,616 2,096,552 (250,064)
Public safety - -
Public works
Highways and streets
Recreation and culture
Community development
Debt service:
Principal
Interest
Capital outlay - -
Total expenditures 2,346,616 2,096,552 (250,064)
Revenues over (under) expenditures (164,316) 167,629 331,945
Other financing sources (uses)
Transfers in 164,316 - (164,316)
Transfers out -
Proceeds on sale of capital assets -
Total other financing sources (uses) 164,316 - (164,316)
Net change in fund balances - 167,629 167,629
Fund balances, beginning of year 600 600 -
Fund balances (deficit), end of year $ 600 $ 168,229 $ 167,629
138
Parks Department State and Federal Grants
Actual Over Actual Over
Final (Under) Final Final (Under) Final
Budget Actual Budget Budget Actual Budget
19,166,562 11,517,692 (7,648,870)
(476,193) 5,953 482,146
18,690,369 11,523,645 (7,166,724)
374,400 153,450 (220,950)
5,649,354 4,206,880 (1,442,474)
528,059 3,361,393 2,833,334
41,175 (41,175) 771,748 716,235 (55,513)
- 7,370,926 3,646,035 (3,724,891)
41,175 (41,175) 14,694,486 12,083,993 (2,610,493)
(41,175) 41,175 3,995,883 (560,348) (4,556,231)
- 430,123 550,210 120,087
- 430,123 550,210 120,087
(41,175) - 41,175 4,426,007 (10,138) (4,436,145)
466,888 466,888 - 14,491 14,491
$ 425,713 $ 466,888 $ 41,175 $ 4,440,498 $ 4,353 (4,436,145)
continued...
139
CITY OF LANSING, MICHIGAN
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Nonmajor Special Revenue Funds
For the Year Ended June 30, 2014
Tri-County Metro
Actual Over
Final (Under) Final
Budget Actual Budget
Revenues
Taxes and special assessments $ - $ - $
Intergovernmental 697,895 697,895
Charges for services - -
Fines and forfeits 435,000 196,244 (238,756)
Contributions - -
Otherrevenues - -
Total revenues 1,132,895 894,139 (238,756)
Expenditures
Current expenditures:
General government - -
Public safety 1,151,494 920,960 (230,534)
Public works - -
Highways and streets
Recreation and culture
Community development
Debt service:
Principal
Interest
Capital outlay - -
Total expenditures 1,151,494 920,960 (230,534)
Revenues over (under) expenditures (18,599) (26,821) (8,222)
Other financing sources (uses)
Transfers in 21,535 21,535 -
Transfers out (2,936) - 2,936
Proceeds on sale of capital assets - - -
Total other financing sources (uses) 18,599 21,535 2,936
Net change in fund balances - (5,286) (5,286)
Fund balances, beginning of year 699,949 699,949
Fund balances (deficit), end of year $ 699,949 $ 694,663 $ (5,286)
concluded
140
CITY OF LANSING, MICHIGAN
Nonmajor Debt Service Funds
1998 Building Authority Fund - This fund accounts for the accumulation of resources for payment
of the 1998 $2,175,000 Building Authority Bonds.
1999 Fire Station Fund - This fund accounts for the accumulation of resources for payment of the
1999 $3,000,000 Unlimited Tax General Obligation Bonds.
2001 Fire Station Fund - This fund accounts for the accumulation of resources for the payment of
the 2001 $4,000,000 Unlimited Tax General Obligation Bonds.
141
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Debt Service Funds
June 30, 2014
1998 1999 2001
Building Fire Fire
Authority Station Station Totals
Assets
Equity in pooled cash and investments $ $ $ $
Fund balances
Restricted $ $ $ $
142
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Debt Service Funds
For the Year Ended June 30, 2014
1998 1999 2001
Building Fire Fire
Authority Station Station Totals
Revenues
Taxes and special assessments $ - $ 259,585 $ 238,704 $ 498,289
Expenditures
Debt service:
Principal 135,000 205,000 310,000 650,000
Interest 36,100 54,763 49,025 139,888
Total expenditures 171,100 259,763 359,025 789,888
Revenues over (under)
expenditures (171,100) (178) (120,321) (291,599)
Other financing sources
Transfers in 171,100 - 120,321 291,421
Net change in fund balances - (178) - (178)
Fund balances, beginning of year 178 178
Fund balances, end of year $ $ - $ $ -
143
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144
CITY OF LANSING, MICHIGAN
Nonmajor Capital Projects Funds
1990 Environmental 1 Fund - This fund accounts for the proceeds of the 1990 $7,000,000
environmental bonds.
1990 Environmental 11 Fund - This fund accounts for the proceeds of the 1990 $6,300,000
environmental bonds.
Special Assessments Fund - This fund is used to account for the financing of public improvements
deemed to benefit the properties against which special assessments are levied.
Lansing Center Improvements Fund - This fund accounts for the proceeds of the 2006 $4,000,000
Lansing Center limited tax bonds.
Other Capital Projects Fund - This fund accounts for miscellaneous capital projects.
145
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Capital Projects Funds
June 30, 2014
1990 1990 Lansing
Environ- Environ- Special Center
mental mental11 Assessments Improvements
Assets
Equity in pooled cash and investments $ 382 $ 158,892 $ $ 53,336
Accounts receivable, net - - -
Special assessments receivable:
Current 56,182
Deferred 444,596
Due from other funds -
Due from other governments - - 1,070 -
Total assets $ 382 $ 158,892 $ 501,848 $ 53,336
Liabilities
Accounts payable $ $ 2,417 $ 17,185 $ 26,768
Advance from other funds - 362,224 -
Total liabilities 2,417 379,409 26,768
Deferred inflows of resources
Unavailable revenue - special assessments - 444,596 -
Fund balances
Restricted 382 156,475 - 26,568
Committed - - -
Unassigned (deficit) - - (322,157) -
Total fund balances (deficit) 382 156,475 (322,157) 26,568
Total liabilities, deferred inflows of
resources and fund balances $ 382 $ 158,892 $ 501,848 $ 53,336
146
Other Totals
$ 571,454 $ 784,064
142,972 142,972
- 56,182
- 444,596
4,055,000 4,055,000
- 1,070
$ 4,769,426 $ 5,483,884
$ 813,202 $ 859,572
- 362,224
813,202 1,221,796
- 444,596
- 183,425
3,956,224 3,956,224
- (322,157)
3,956,224 3,817,492
$ 4,769,426 $ 5,483,884
147
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Capital Projects Funds
For the Year Ended June 30, 2014
1990 1990 Lansing
Environ- Environ- Special Center
mental mental11 Assessments Improvements
Revenues
Special assessments $ $ $ 97,774 $
Charges for services -
Interest -
Total revenues 97,774 -
Expenditures
Capital outlay 14,217 - 47,675
Revenues over (under) expenditures (14,217) 97,774 (47,675)
Other financing sources (uses)
Transfers in -
Transfers out
Issuance of long-term debt
Total other financing sources (uses) -
Net change in fund balances (14,217) 97,774 (47,675)
Fund balances (deficit), beginning of year 382 170,692 (419,931) 74,243
Fund balances (deficit), end of year $ 382 $ 156,475 $ (322,157) $ 26,568
148
Other Totals
$ - $ 97,774
803,748 803,748
713 713
804,461 902,235
2,724,784 2,786,676
(1,920,323) (1,884,441)
2,847,400 2,847,400
(1,525,410) (1,525,410)
986,300 986,300
2,308,290 2,308,290
387,967 423,849
3,568,257 3,393,643
$ 3,956,224 $ 3,817,492
149
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150
CITY OF LANSING, MICHIGAN
Nonmajor Permanent Funds
Cemetery Perpetual Care Fund - This fund accounts for transfers from the Cemetery Fund,
representing 15% of lot sales. These funds are invested, and all investment earnings are transferred
to the Cemetery Fund for lot maintenance.
Parks Trust Fund - This fund accounts for contributions made for City parks, the principal of which
must be preserved in accordance with the trust indentures. Income derived from these
contributions is transferred to the Parks Department special revenue fund.
151
CITY OF LANSING, MICHIGAN
Combining Balance Sheet
Nonmajor Permanent Funds
June 30, 2014
Cemetery
Perpetual Parks
Care Trust Totals
Assets
Equity in pooled cash and investments $ 1,717,344 $ 1,251 $ 1,718,595
Fund balances
Nonspendable $ 1,717,344 $ 1,251 $ 1,718,595
152
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Permanent Funds
For the Year Ended June 30, 2014
Cemetery
Perpetual Parks
Care Trust Totals
Revenues
Interest $ 6,703 $ $ 6,703
Other financing sources (uses)
Transfers in 15,650 15,650
Transfers out (6,703) (6,703)
Total other financing sources (uses) 8,947 8,947
Net change in fund balances 15,650 15,650
Fund balances, beginning of year 1,701,694 1,251 1,702,945
Fund balances, end of year $ 1,717,344 $ 1,251 $ 1,718,595
153
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154
CITY OF LANSING, MICHIGAN
Nonmajor Enterprise Funds
Cemetery Fund - This fund accounts for the operation of City-owned cemeteries.
Golf Fund - This fund accounts for the operation of the City-owned golf courses.
Garbage and Rubbish Collection Fund - This fund accounts for the provision of household solid
waste disposal services to participating residents of the City.
Recycling Fund - This fund accounts for the provision of recycling services to participating residents
of the City.
155
CITY OF LANSING, MICHIGAN
Combining Statement of Net Position
Nonmajor Enterprise Funds
June 30, 2014
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Assets
Current assets:
Cash and cash equivalents $ 200 $ 300 $ - $ - $ 500
Equity in pooled cash and investments 137,341 104,155 105,815 1,474,802 1,822,113
Accounts receivable, net - 5,292 50,584 - 55,876
Inventories 58,839 6,214 23,125 - 88,178
Total current assets 196,380 115,961 179,524 1,474,802 1,966,667
Noncurrent assets:
Capital assets not being depreciated 57,740 446,501 - - 504,241
Capital assets being depreciated, net 144,704 2,109,580 1,655,567 3,909,851
Total noncurrent assets 202,444 2,556,081 - 1,655,567 4,414,092
Total assets 398,824 2,672,042 179,524 3,130,369 6,380,759
Deferred outflows of resources
Deferred refunding loss - 7,291 - - 7,291
Liabilities
Current liabilities:
Accounts payable 39,463 2,890 49,924 56,638 148,915
Deposits payable - - 4,140 - 4,140
Accrued interest payable - 610 - 8,174 8,784
Accrued payroll 1,015 15,441 - 16,456
Due to other funds - 5,271 - 5,271
Unearned revenues 39,870 67,677 - 107,547
Current portion of:
Bonds and notes payable - 100,000 - 208,649 308,649
Total current liabilities 40,478 164,082 121,741 273,461 599,762
Noncurrent liabilities:
Bonds and notes payable, net
of current portion - 205,000 - 1,459,432 1,664,432
Compensated absences, net
of current portion 31,884 57,956 49,870 103,827 243,537
Total noncurrent liabilities 31,884 262,956 49,870 1,563,259 1,907,969
Total liabilities 72,362 427,038 171,611 1,836,720 2,507,731
Net position
Net investment in capital assets 202,444 2,258,372 - (12,514) 2,448,302
Unrestricted 124,018 (6,077) 7,913 1,306,163 1,432,017
Total net position $ 326,462 $ 2,252,295 $ 7,913 $ 1,293,649 $ 3,880,319
156
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenses and Changes in Fund Net Position
Nonmajor Enterprise Funds
For the Year Ended June 30, 2014
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Operating revenues
Charges for services $ 289,565 $ 366,567 $ 1,664,201 $ 3,508,536 $ 5,828,869
Operating expenses
Personal services 376,005 539,933 978,657 1,793,176 3,687,771
Purchase of goods and services 330,075 283,083 744,186 1,292,870 2,650,214
Depreciation 16,190 91,118 - 150,506 257,814
Total operating expenses 722,270 914,134 1,722,843 3,236,552 6,595,799
Operating income (loss) (432,705) (547,567) (58,642) 271,984 (766,930)
Nonoperating expenses
Interest revenue 9,520 - 9,520
Interest expense and fees (21,537) (27,001) (48,538)
Total nonoperating revenues
(expenses) (12,017) (27,001) (39,018)
Income (loss) before transfers (432,705) (559,584) (58,642) 244,983 (805,948)
Transfers in 458,103 563,184 - 1,021,287
Transfers out (15,650) - - (15,650)
Change in net position 9,748 3,600 (58,642) 244,983 199,689
Net position, beginning of year,
as restated 316,714 2,248,695 66,555 1,048,666 3,680,630
Net position, end of year $ 326,462 $ 2,252,295 $ 7,913 $ 1,293,649 $ 3,880,319
157
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2014
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Cash flows from operating activities
Cash received from customers $ 289,565 $ 373,105 $ 1,687,783 $ 3,508,536 $ 5,858,989
Cash payments for goods and services (341,123) (358,223) (1,222,064) (1,273,719) (3,195,129)
Cash payments to employees (373,902) (531,691) (975,528) (1,787,294) (3,668,415)
Net cash provided by (used in)
operating activities (425,460) (516,809) (509,809) 447,523 (1,004,555)
Cash flows from noncapital
financing activities
Transfers in 458,103 563,184 - 1,021,287
Transfers out (15,650) - (15,650)
Net cash provided by
noncapital financing activities 442,453 563,184 1,005,637
Cash flows from capital and related
financing activities
Acquisition of capital assets - - (1,806,073) (1,806,073)
Proceeds from issuance of
long-term debt 1,737,700 1,737,700
Principal paid on long-term debt (100,000) (69,619) (169,619)
Interest paid on long-term debt (19,240) (18,827) (38,067)
Net cash used in capital and related
financing activities (119,240) (156,819) (276,059)
Cash flows from investing activities
Interest and dividends received - 9,520 - 9,520
Net change in cash and cash equivalents 16,993 (63,345) (509,809) 290,704 (265,457)
Cash and cash equivalents:
Beginning of year 120,548 167,800 615,624 1,184,098 2,088,070
End of year $ 137,541 $ 104,455 $ 105,815 $ 1,474,802 $ 1,822,613
Reconciliation to statement of net position
Cash and cash equivalents $ 200 $ 300 $ - $ - $ 500
Equity in pooled cash and investments 137,341 104,155 105,815 1,474,802 1,822,113
$ 137,541 $ 104,455 $ 105,815 $ 1,474,802 $ 1,822,613
continued...
158
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended June 30, 2014
Garbage and
Rubbish
Cemetery Golf Collection Recycling Totals
Reconciliation of operating income (loss)
to net cash used in
operating activities
Operating loss $ (432,705) $ (547,567) $ (58,642) $ 271,984 $ (766,930)
Adjustments to reconcile operating income
(loss) to net cash provided by (used in)
operating activities:
Depreciation expense 16,190 91,118 150,506 257,814
Changes in operating assets and liabilities
that provided (used) cash:
Accounts receivable - (3,222) (9,271) - (12,493)
Inventories 4,377 873 (6,252) - (1,002)
Accounts payable (15,425) (6,013) 28,374 19,151 26,087
Deposits payable - - (270) - (270)
Accrued payroll 288 1,777 - 2,065
Due to other funds - (70,000) (500,000) (570,000)
Unearned revenues - 9,760 33,123 - 42,883
Compensated absences 1,815 6,465 3,129 5,882 17,291
Net cash provided by (used in)
operating activities $ (425,460) $ (516,809) $ (509,809) $ 447,523 $ (1,004,555)
concluded
159
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160
CITY OF LANSING, MICHIGAN
Internal Service Funds
Fleet Maintenance Fund - This fund accounts for the costs of maintaining the City's fleet of
vehicles and heavy equipment.
Fringe Benefits Fund - This fund accounts for the costs of the City's fringe benefits.
Engineering Fund - This fund accounts for the operations of the City's engineering department.
Information Technology Fund - This fund accounts for the operations of the City's information
technology department.
161
CITY OF LANSING, MICHIGAN
Combining Statement of Net Position
Internal Service Funds
June 30, 2014
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
Assets
Current assets:
Cash and cash equivalents $ 1,892,332 $ - $ - $ - $ 1,892,332
Equity in pooled cash and investments - 1,365,440 841,338 765,841 2,972,619
Accounts receivable, net - 425,199 - - 425,199
Inventories 472,528 - - 472,528
Prepaids - 470,513 79,700 - 550,213
Total current assets 2,364,860 2,261,152 921,038 765,841 6,312,891
Noncurrent assets:
Capital assets not being
depreciated 1,715,680 - - - 1,715,680
Capital assets being depreciated,
net 9,914,060 1,697,196 11,611,256
Total noncurrent assets 11,629,740 - 1,697,196 - 13,326,936
Total assets 13,994,600 2,261,152 2,618,234 765,841 19,639,827
Deferred outflows of resources
Deferred refunding loss - - 6,879 - 6,879
Liabilities
Current liabilities:
Accounts payable 152,021 816,123 1,461 538,089 1,507,694
Accrued interest payable 45,002 - 620 - 45,622
Accrued payroll 45,233 4,438 29,243 12,256 91,170
Claims incurred but not reported - 831,808 - - 831,808
Due to other funds 1,300,000 - 5,000 1,305,000
Negative equity in pooled cash 631,781 - 631,781
Current portion of:
Bonds and notes payable 693,702 155,000 - 848,702
Compensated absences 2,246 - 70,326 31,564 104,136
Total current liabilities 2,869,985 1,652,369 261,650 581,909 5,365,913
Noncurrent liabilities:
Bonds and notes payable,
net of current portion 5,212,167 - 155,000 - 5,367,167
Compensated absences,
net of current portion 233,124 38,460 332,178 109,075 712,837
Total noncurrent liabilities 5,445,291 38,460 487,178 109,075 6,080,004
Total liabilities 8,315,276 1,690,829 748,828 690y984 11,445,917
Net position
Net investment in capital assets 5,723,871 - 1,394,075 - 7,117,946
Unrestricted (deficit) (44,547) 570,323 482,210 74,857 1,082,843
Total net position $ 5,679,324 $ 570,323 $ 1,876,285 $ 74,857 $ 8,200,789
162
CITY OF LANSING, MICHIGAN
Combining Statement of Revenues, Expenses and Changes in Fund Position
Internal Service Funds
For the Year Ended June 30, 2014
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
Operating revenues
Charges for services $ 8,086,274 $ 60,104,365 $ 3,861,690 $ 3,080,000 $ 75,132,329
Operating expenses
Personal services 3,359,959 260,570 2,711,922 1,423,888 7,756,339
Purchase of goods and services 4,774,634 59,301,275 888,020 1,581,255 66,545,184
Depreciation 1,436,632 - 45,431 - 1,482,063
Total operating expenses 9,571,225 59,561,845 3,645,373 3,005,143 75,783,586
Operating income (loss) (1,484,951) 542,520 216,317 74,857 (651,257)
Nonoperating revenues (expenses)
Gain on sale of capital assets 345,736 - - - 345,736
Interest expense and fees (190,714) 3,734 (186,980)
Total nonoperating revenues
(expenses) 155,022 - 3,734 - 158,756
Income (loss) before transfers (1,329,929) 542,520 220,051 74,857 (492,501)
Transfers in 1,620,000 - - - 1,620,000
Change in net position 290,071 542,520 220,051 74,857 1,127,499
Net position, beginning of year, as restated 5,389,253 27,803 1,656,234 - 7,073,290
Net position, end of year $ 5,679,324 $ 570,323 $ 1,876,285 $ 74,857 $ 8,200,789
163
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2014
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
Cash flows from operating activities
Cash received from interfund
services $ 8,086,274 $ 61,067,372 $ 3,861,690 $ 3,080,000 $ 76,095,336
Cash payments for goods
and services (5,344,196) (59,497,718) (961,545) (1,043,166) (66,846,625)
Cash payments to employees (3,306,885) (251,453) (2,771,203) (1,270,993) (7,600,534)
Net cash provided by (used in)
operating activities (564,807) 1,318,201 128,942 765,841 1,648,177
Cash flows from noncapital
financing activities
Transfers in 1,620,000 - - - 1,620,000
Cash flows from capital and related
financing activities
Proceeds on sale of capital assets 345,736 345,736
Acquisition and construction of
capital assets (4,606,487) (4,606,487)
Proceeds from issuance of
long-term debt 1,550,855 1,550,855
Principal paid on long-term debt (575,835) (155,000) (730,835)
Interest paid on long-term debt (162,211) (11,161) (173,372)
Net cash used in capital and related
financing activities (3,447,942) - (166,161) - (3,614,103)
Net change in cash and cash equivalents (2,392,749) 1,318,201 (37,219) 765,841 (345,926)
Cash and cash equivalents,
beginning of year 3,653,300 47,239 878,557 - 4,579,096
Cash and cash equivalents,
end of year $ 1,260,551 $ 1,365,440 $ 841,338 $ 765,841 $ 4,233,170
Reconciliation to statement of net position
Cash and cash equivalents $ 1,892,332 $ - $ - $ - $ 1,892,332
Equity in pooled cash and investments - 1,365,440 841,338 765,841 2,972,619
Negative equity in pooled cash (631,781) - - - (631,781)
$ 1,260,551 $ 1,365,440 $ 841,338 $ 765,841 $ 4,233,170
continued...
164
CITY OF LANSING, MICHIGAN
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2014
Fleet Fringe Information
Maintenance Benefits Engineering Technology Totals
Reconciliation of operating income (loss)to net
cash provided by (used in) operating activities
Operating income (loss) $ (1,484,951) $ 542,520 $ 216,317 $ 74,857 $ (651,257)
Adjustments to reconcile operating
income (loss) to net cash provided
by (used in) operating activities:
Depreciation expense 1,436,632 - 45,431 1,482,063
Change in operating assets and liabilities
that provided (used) cash:
Accounts receivable - 12,763 - 12,763
Due from other funds - 950,244 950,244
Inventories 371,190 - 371,190
Prepaids - (63,898) (79,700) - (143,598)
Accounts payable (740,752) (132,545) 1,175 538,089 (334,033)
Accrued payroll 7,454 977 5,921 12,256 26,608
Claims incurred but not reported
reported - 17,794 - - 17,794
Due to other funds (200,000) - 5,000 - (195,000)
Compensated absences 45,620 (9,654) (65,202) 140,639 111,403
Net cash provided by (used in)
operating activities $ (564,807) $ 1,318,201 $ 128,942 $ 765,841 $ 1,648,177
concluded
165
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166
CITY OF LANSING, MICHIGAN
Agency Funds
Bail Bonds Fund - This fund is used to hold cash received by the District Court for bail bonds.
Garnishment, Indemnity Bond and Restitution Fund - This fund is used to hold cash received by the
District Court for garnishment payments until claimed, and to hold indemnity bonds deposited
relating to civil disputes until the Court rules on the case.
167
CITY OF LANSING, MICHIGAN
Combining Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2014
54-A District Court
Garnishment,
Bail Indemnity Bond
Bonds and Restitution Totals
Assets
Equity in pooled cash and investments $ 59,903 $ 31,507 $ 91,410
Liabilities
Undistributed receipts $ 59,903 $ 31,507 $ 91,410
168
CITY OF LANSING, MICHIGAN
Combining Statement of Changes in Fiduciary Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2014
Beginning Ending
Balance Additions Deletions Balance
54-A District Court - Bail Bonds
Assets
Equity in pooled cash and investments $ 63,131 $ 431,964 $ 435,192 $ 59,903
Liabilities
Undistributed receipts $ 63,131 $ 431,964 $ 435,192 $ 59,903
54-A District Court - Garnishment,
Indemnity Bond and Restitution
Assets
Equity in pooled cash and investments $ 31,395 $ 290,042 $ 289,930 $ 31,507
Liabilities
Undistributed receipts $ 31,395 $ 290,042 $ 289,930 $ 31,507
Total - all agency funds
Assets
Equity in pooled cash and investments $ 94,526 $ 722,006 $ 725,122 $ 91,410
Liabilities
Undistributed receipts $ 94,526 $ 722,006 $ 725,122 $ 91,410
169
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170
STATISTICAL SECTION
171
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172
CITY OF LANSING, MICHIGAN
Statistical Section Table of Contents
This part of the City of Lansing, Michigan's (the "City") comprehensive annual financial report presents
detailed information as a context for understanding what the information in the financial statements,
note disclosures, and required supplementary information says about the City's overall financial health.
Page
Financial Trends These schedules contain trend information to help the reader
understand how the City's financial performance and well-being
have changed over time. 175
Revenue Capacity These schedules contain information to help the reader assess
the factors affecting the City's ability to generate its property
taxes. 180
Debt Capacity These schedules present information to help the reader assess
the affordability of the City's current levels of outstanding debt
and the City's ability to issue additional debt in the future. 184
Demographic and These schedules offer demographic and economic indicators to
Economic Information help the reader understand the environment within which the
City's financial activities take place and to help make
comparisons over time and with other governments. 189
Operating Information These schedules contain information about the City's operations
and resources to help the reader understand how the City's
financial information relates to the services the City provides and
the activities it performs. 191
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
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174
CITY OF LANSING, MICHIGAN Table 1 -Unaudited
Net Assets/Net Position by Component
Last Ten Fiscal Years
1 2014----L 2010 0 2008 1
(2)
Governmental activities
Net investment in capital assets $ 150,976,010 $ 154,372,604 $ 163,723,249 $ 180,571,237 $ 186,536,428 $ 191,516,475 $ 187,054,852 $ 184,150,439 $ 190,243,447 $ 198,338,788
Restricted 13,133,137 12,552,011 14,524,584 14,777,571 14,304,689 17,139,090 34,554,539 37,642,784 36,706,345 33,900,657
Unrestricted (46,344,555) (39,467,672) (34,371,855) (18,840,717) (7,649,432) 6,589,790 (3,124,027) 2,776,006 514,601 1,632,040
Total governmental activities net assets/
net position $ 117,764,592 $ 127,456,943 $ 143,875,978 $ 176,508,091 $ 193,191,685 $ 215,245,355 $ 218,485,364 $ 224,569,229 $ 227,464,393 $ 233,871,485
Business-type activities
Net investment in capital assets $ 214,458,841 $ 212,682,278 $ 209,584,457 $ 204,149,751 $ 194,854,140 $ 185,430,669 $ 178,526,049 $ 166,320,408 $ 161,324,071 $ 163,834,290
Restricted 8,746,096 11,077,134 12,382,060 13,080,302 19,917,341 19,454,812 30,892,739 35,777,715 35,945,848 39,493,526
Unrestricted 37,891,053 31,943,581 32,196,598 34,177,453 30,193,568 23,730,694 16,330,517 28,929,677 28,208,193 22,701,430
Total business-type activities net assets/
net position $ 261,095,990 $ 255,702,993 $ 254,163,115 $ 251,407,506 $ 244,965,049 $ 228,616,175 $ 225,749,305 $ 231,027,800 $ 225,478,112 $ 226,029,246
Primary government
Net investment in capital assets $ 365,434,851 $ 367,054,882 $ 373,307,706 $ 384,720,988 $ 381,390,568 $ 376,947,144 $ 365,580,901 $ 350,470,847 $ 351,567,518 $ 362,173,078
Restricted 21,879,233 23,629,145 26,906,644 27,857,873 34,222,030 36,593,902 65,447,278 73,420,499 72,652,193 73,394,183
Unrestricted(deficit) (8,453,502) (7,524,091) (2,175,257) 15,336,736 22,544,136 30,320,484 13,206,490 31,705,683 28,722,794 24,333,470
Total primary government net assets/
net position $ 378,860,582 $ 383,159,936 $ 398,039,093 $ 427,915,597 $ 438,156,734 $ 443,861,530 $ 444,234,669 $ 455,597,029 $ 452,942,505 $ 459,900,731
(1)no discretely presented component units shown
(2)in 2005 the City's definition of'restricted net assets"was changed to include assets in funds set up to account for
activities outside of the General Fund,for Governmental Activities,and to include restricted cash for debt retirement
for Business-type Activities.
175
CITY OF LANSING, MICHIGAN Table 2-Unaudited
Change in Net Assets/Net Position
Last Ten Fiscal Years
----------
Expenses
Governmental activities:
General government $ 24,771,054 $ 27,438,065 $ 30,841,776 $ 25,665,269 $ 30,326,671 $ 26,426,242 $ 28,901,548 $ 22,043,283 $ 34,375,762 $ 53,533,838
Public safety 78,142,897 77,133,469 82,369,004 83,546,997 84,566,215 71,236,947 76,211,756 62,570,888 60,047,271 38,668,349
Public works 37,243,516 29,984,955 33,144,303 26,355,375 29,252,516 37,588,680 40,032,746 40,517,063 31,790,944 30,670,483
Recreation and culture 8,670,918 7,713,098 8,889,142 8,245,451 7,312,480 7,298,385 7,677,083 6,198,462 7,881,212 5,464,143
Community development 7,602,229 16,939,572 13,623,946 12,825,028 9,715,087 6,378,286 6,382,336 6,232,406 7,124,491 6,996,000
Interest on long-term debt 1,340,818 1,475,051 1,949,825 2,116,535 2,229,288 1,803,125 1,481,658 1,658,708 1,197,851 1,033,078
Total governmental activities expenses 157,771,432 160,684,210 170,817,996 158,754,655 163,402,257 150,731,665 160,687,127 139,220,810 142,417,531 136,365,891
Business-type activities:
Sewage disposal system 28,682,809 26,298,964 26,836,597 26,444,741 24,931,075 26,247,188 27,382,736 24,725,229 21,706,537 20,631,611
Municipal parking system 7,851,702 8,108,373 9,491,376 9,896,498 8,305,095 8,353,063 10,188,065 10,275,379 18,403,163 10,151,018
Cemetery 722,270 633,050 639,000 755,766 659,584 689,979 675,672 692,510 753,151 802,949
Golf 935,671 892,117 810,372 846,817 869,003 927,200 1,072,505 1,358,008 1,398,963 1,446,615
Garbage and rubbish collection 1,722,843 1,557,708 1,558,024 1,515,600 1,451,059 1,547,372 1,436,642 1,372,266 1,412,620 1,421,617
Recycling 3,263,553 3,650,292 3,041,328 2,809,353 2,804,047 3,008,750 2,940,366 2,777,068 2,981,730 2,862,003
Potter Park Zoo - - - - - - (156,270) 2,968,236 2,718,759 2,690,943
Total business-type activities expenses 43,178,848 41,140,504 42,376,697 42,268,775 39,019,863 40,773,552 43,539,716 44,168,696 49,374,923 40,006,756
Total primary government expenses $ 200,950,280 $ 201,824,714 $ 213,194,693 $ 201,023,430 $ 202,422,120 $ 191,505,217 $ 204,226,843 $ 183,389,506 $ 191,792,454 $ 176,372,647
Program revenues
Governmental activities:
Charges for services:
General government $ 6,820,261 $ 6,162,713 $ 6,428,110 $ 6,742,306 $ 6,565,263 $ 5,188,510 $ 5,938,911 $ 6,251,032 $ 6,416,850 $ 6,264,142
Public safety 2,122,023 4,083,222 8,525,524 8,975,173 8,589,146 9,817,421 12,705,181 13,014,934 13,087,372 12,400,853
Public works 2,129,126 1,622,738 2,797,443 2,449,606 2,788,112 4,565,013 4,364,525 3,805,739 3,891,646 2,646,007
Recreation and culture 800,293 594,349 557,609 685,120 587,906 1,217,445 1,556,260 1,259,373 1,405,584 1,598,968
Community development 67,323 67,349 67,344 122,326 69,250 50,132 66,308 66,161 66,486 66,788
Operating grants and contributions 28,234,803 29,322,435 31,928,983 30,154,681 27,515,892 26,462,211 20,356,292 16,524,178 16,158,496 16,673,481
Capital grants and contributions 3,365,682 3,124,288 260,656 189,414 3,109,410 2,571,741 2,531,974 2,179,870 3,659,169 3,479,536
Total governmental activities program revenues 43,539,511 44,977,094 50,565,669 49,318,626 49,224,979 49,872,473 47,519,451 43,101,287 44,685,603 43,129,775
Business-type activities:
Charges for services:
Sewage disposal system 31,759,698 30,825,174 29,915,799 29,205,945 28,907,772 27,446,304 28,023,322 26,926,202 26,867,610 26,890,756
Municipal parking system 7,453,476 5,267,627 6,858,606 7,539,179 7,396,219 7,539,611 10,090,566 10,838,270 10,289,830 9,628,690
Cemetery 289,565 314,913 240,394 225,947 226,973 248,314 218,688 264,255 237,564 230,716
Golf 366,567 373,000 390,134 382,546 438,315 448,067 607,922 754,995 890,190 929,266
Garbage and rubbish collection 1,664,201 1,131,659 1,459,101 1,507,577 1,677,428 1,486,531 1,617,717 1,378,562 1,295,053 1,322,111
Recycling 3,508,536 3,434,622 2,818,364 2,609,423 2,651,309 2,945,061 3,039,089 2,903,092 2,816,277 2,636,002
Potter Park Zoo - - - - - - (115) 553,999 471,703 558,654
Operating grants and contributions 2,574,949 1,193,571 1,331,737 4,456,708 1,535,907 1,541,913 - - - -
Capital grants and contributions - - 2,683,657 1,439,044 11,928,108 60,318 196,317 183,012 1,368,773 731,575
Total business-type activities program revenues 47,616,992 42,540,566 45,697,792 47,366,369 54,762,031 41,716,119 43,793,506 43,802,387 44,237,000 42,927,770
Total primary government program revenues $ 91,156,503 $ 87,517,660 $ 96,263,461 $ 96,684,995 $ 103,987,010 $ 91,588,592 $ 91,312,957 $ 86,903,674 $ 88,922,603 $ 86,057,545
Net(expenses)revenues
Governmental activities $(114,231,921) $(115,707,116) $(120,252,327) $(109,436,029) $(114,177,278) $(100,859,192) $(113,167,676) $ (96,119,523) $ (97,731,928) $ (93,236,116)
Business-type activities 4,438,144 1,400,062 3,321,095 5,097,594 15,742,168 942,567 253,790 (366,309) (5,137,923) 2,921,014
Total primary government net expense $(109,793,777) $(114,307,054) $(116,931,232) $(104,338,435) $ (98,435,110) $ (99,916,625) $(112,913,886) $ (96,485,832) $(102,869,851) $ (90,315,102)
continued...
176
CITY OF LANSING, MICHIGAN
Change in Net Assets/Net Position
Last Ten Fiscal Years
----------
General revenues and other changes in net assets/net position
Governmental activities:
Taxes:
Property taxes $ 38,079,548 $ 38,668,837 $ 33,506,860 $ 37,233,590 $ 39,010,960 $ 39,141,928 $ 38,607,761 $ 38,371,105 $ 37,506,017 $ 36,181,408
Income taxes 31,450,913 29,850,755 27,943,070 28,699,749 27,408,443 29,312,762 31,168,012 28,209,913 27,032,176 27,435,047
Unrestricted grants and contributions 35,677,910 31,425,718 26,441,961 27,254,574 25,847,423 27,318,313 28,180,799 27,258,536 26,817,633 26,355,710
Investment earnings 36,836 58,588 69,265 89,735 246,495 978,034 1,706,572 2,483,162 1,634,608 715,608
Miscellaneous - - 123,066 108,601 75,094 32,310 - - 774,822 104,563
Transfers (705,637) (583,117) (464,008) (633,814) (464,807) (509,728) 7,420,667 (3,098,357) (3,132,465) (2,123,435)
Total governmental activities 104,539,570 99,420,781 87,620,214 92,752,435 92,123,608 96,273,619 107,083,811 93,224,359 90,632,791 88,668,901
Business-type activities:
Investment earnings 246,616 356,467 271,067 689,883 141,899 413,850 1,883,034 2,815,480 1,453,076 1,298,407
Miscellaneous 2,600 - (1,300,561) 21,166 - 725 5,348 2,160 1,248 23,736
Transfers 705,637 583,117 464,008 633,814 464,807 509,728 (7,420,667) 3,098,357 3,132,465 2,123,435
Total business-type activities 954,853 939,584 (565,486) 1,344,863 606,706 924,303 (5,532,285) 5,915,997 4,586,789 3,445,578
Total primary government $ 105,494,423 $ 100,360,365 $ 87,054,728 $ 94,097,298 $ 92,730,314 $ 97,197,922 $ 101,551,526 $ 99,140,356 $ 95,219,580 $ 92,114,479
Changes in net assets/net position
Governmental activities $ (9,692,351) $ (16,286,335) $ (32,632,113) $ (16,683,594) $ (22,053,670) $ (4,585,573) $ (6,083,865) $ (2,895,164) $ (7,099,137) $ (4,567,215)
Business-type activities 5,392,997 2,339,646 2,755,609 6,442,457 16,348,874 1,866,870 (5,278,495) 5,549,688 (551,134) 6,366,592
Total primary government $ (4,299,354) $ (13,946,689) $ (29,876,504) $ (10,241,137) $ (5,704,796) $ (2,718,703) $ (11,362,360) $ 2,654,524 $ (7,650,271) $ 1,799,377
concluded
(1)No discretely presented component units shown
177
CITY OF LANSING, MICHIGAN Table 3-Unaudited
Fund Balances, Governmental Funds
Last Ten Fiscal Years
2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
(2) (1)
General fund
Nonspendable $ 79,770 $ 75,738 $ 92,538 $ 171,586 $ $ $ $ $ $
Restricted 36,854 9,400 16,256 41,129
Committed 2,038,608 2,976,408 65,373 178,081
Unassigned 7,052,830 5,633,528 5,198,032 4,939,691 -
Reserved - - - - 102,732 1,320,375 1,765,288 1,848,021 2,443,224 2,482,589
Unreserved - - - - 389,061 3,755,862 5,465,164 5,036,129 4,634,961 4,709,909
Total general fund 9,208,062 8,695,074 5,372,199 5,330,487 491,793 5,076,237 7,230,452 6,884,150 7,078,185 7,192,498
All other governmental funds
Nonspendable 2,551,975 2,671,151 2,852,004 3,006,507 - - - - - -
Restricted 6,902,928 4,368,983 5,566,421 7,412,008
Committed 4,623,112 4,035,145 4,109,131 4,908,740
Unassigned(deficit) (522,157) (619,931) (543,774) (371,285) - - - - - -
Reserved 1,177,998 324,366 365,351 2,544,339 613,533 2,139,438
Unreserved,reported in:
Special revenue funds 12,029,680 13,394,485 14,716,755 14,523,146 18,798,291 17,635,170
Capital projects funds 11,614,644 12,010,219 17,862,441 18,978,360 15,717,371 12,563,759
Debt service funds 126,434 186,636 256,144 144,518 88,826 4,400
Permanent funds 1,649,550 1,630,098 1,609,992 1,596,939 1,577,150 1,557,890
Total all other governmental funds 13,555,858 10,455,348 11,983,782 14,955,970 26,598,306 27,545,804 34,810,683 37,787,302 36,795,171 33,900,657
Total all governmental funds $ 22,763,920 $ 19,150,422 $ 17,355,981 $ 20,286,457 $ 27,090,099 $ 32,622,041 $ 42,041,135 $ 44,671,452 $ 43,873,356 $ 41,093,155
(1)In 2005 the City's definition for Permanent Funds fund balance changed to"unreserved"due to the nature of the funds
being set up as a reserved fund
(2)The City implemented GASB 54 for the Fiscal Year Ended June 30,2011. Prior years were not restated retroactively.
178
CITY OF LANSING, MICHIGAN Table 4-Unaudited
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
2014 -----�` --
Revenues
Property taxes $ 38,151,162 $ 38,717,552 $ 33,583,448 $ 37,371,885 $ 39,279,343 $ 39,258,893 $ 38,775,722 $ 38,681,928 $ 37,957,773 $ 36,527,417
Income taxes 31,450,913 29,850,755 27,943,070 28,699,749 27,408,443 29,312,762 31,168,012 28,209,913 27,032,176 27,497,542
Licenses and permits 1,508,133 1,509,402 1,538,325 1,598,804 1,414,906 1,325,119 1,429,075 1,101,550 860,647 791,655
Intergovernmental 41,658,435 40,639,183 41,431,793 40,304,785 39,137,217 38,998,039 38,556,616 34,699,908 34,964,225 35,624,372
Charges for services 13,037,014 11,754,381 18,676,398 18,606,304 18,323,158 20,355,642 19,116,593 18,415,612 19,436,267 17,931,572
Fines and forfeits 2,738,392 3,694,351 2,884,328 3,325,728 4,579,175 4,143,000 4,090,397 4,349,642 4,515,951 4,351,977
Interest and rents 56,550 53,179 63,571 88,516 249,464 1,196,559 1,836,485 2,607,388 1,710,674 720,707
Contributions 20,725,882 16,247,403 12,369,733 11,821,388 10,606,368 10,372,056 10,894,573 9,980,854 9,385,831 8,966,289
Donations from private sources - - 5,000 - 9,000 44,000 326,768 114,954 549,055 126,182
Otherrevenue 653,506 510,515 400,074 504,856 473,123 1,054,209 331,248 1,019,476 1,082,283 1,320,064
Total revenues 149,979,987 142,976,721 138,895,740 142,322,015 141,480,197 146,060,279 146,525,489 139,181,225 137,494,882 133,857,777
Expenditures
General government 21,063,589 23,595,321 25,038,589 26,396,516 27,839,564 28,951,805 29,209,458 28,905,058 34,956,037 55,746,807
Public safety 72,068,298 63,943,082 66,161,872 70,397,235 70,820,184 70,082,462 67,715,160 65,218,515 59,143,629 38,121,596
Public works 13,456,773 8,908,673 6,225,177 6,002,823
Highways and streets 10,496,880 9,937,423 8,589,298 8,494,233 14,506,982 14,723,311 14,860,390 13,501,747 10,879,004 10,467,860
Recreation and culture 8,457,444 6,629,453 6,996,562 7,464,193 8,127,700 8,452,768 8,038,290 7,676,600 7,509,183 5,517,980
Community development 3,646,035 - - - - - - - - -
Other functions 2,620,316 23,699,202 17,999,264 15,675,003 15,182,675 12,599,072 11,805,843 9,847,925 8,259,415 8,520,848
Capital outlay 8,715,193 5,489,617 6,466,084 9,956,103 14,781,728 14,855,863 16,228,127 20,001,659 13,306,810 12,614,723
Debt service:
Interest 1,185,257 1,378,856 1,836,218 3,210,220 3,270,068 1,801,394 1,607,703 1,285,436 1,145,588 1,187,673
Principal 3,485,104 3,137,159 3,448,080 2,070,552 2,165,237 4,743,146 4,721,581 3,875,909 3,244,879 3,592,766
Issuance costs - 42,744 - 48,804 - - - - - -
Total expenditures 145,194,889 146,761,530 142,761,144 149,715,682 156,694,138 156,209,821 154,186,552 150,312,849 138,444,545 135,770,253
Excess of revenues over under expenditures 4,785,098 (3,784,809) (3,865,404) (7,393,667) (15,213,941) (10,149,542) (7,661,063) (11,131,624) (949,663) (1,912,476)
Other financing sources(uses)
Proceeds from borrowing 986,300 11,932,046 - 2,470,000 10,146,117 - 4,052,979 15,190,077 6,087,507 1,784,465
Proceeds from sale of capital assets 167,737 497,833 1,398,936 1,210,046 689 1,587,216 - - 774,822 74,565
Payment to escrow agent - (6,015,112) - (2,456,207) - - - -
Insurance proceeds - - - - - 120,960 - - - -
Transfers in 10,522,162 7,056,932 7,893,879 9,602,095 16,181,590 11,601,871 13,507,521 6,908,259 8,170,998 8,274,929
Transfers out (12,847,799) (1,892,449) (8,357,887) (10,235,909) (16,646,397) (12,579,599) (12,529,754) (10,168,616) (11,303,463) (10,398,364)
Total other financing sources(uses) (1,171,600) 11,579,250 934,928 590,025 9,681,999 730,448 5,030,746 11,929,720 3,729,864 (264,405)
Net change in fund balance $ 3,613,498 $ 7,794,441 $ (2,930,476) $ (6,803,642) $ (5,531,942) $ (9,419,094) $ (2,630,317) $ 798,096 $ 2,780,201 $ (2,176,881)
Debt service as a percentage of
noncapital expenditures 3.4% 3.2% 3.8% 3.7% 3.9% 4.5% 4.6% 4.0% 3.4% 3.8%
179
CITY OF LANSING, MICHIGAN Table 5 - Unaudited
Assessed and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(rate per $1,000 of assessed value)
Fiscal Total Assessed
Year Personal Total Taxable Direct Estimated Value as a
Ended Residential Commercial Industrial Agricultural Developmental Property Assessed Tax Actual Percentage of
June 30, Property Property Property Property Property Valuation Valuation Rate Value Actual Value
2005 $ 1,196,695,728 $702,969,958 $ 175,906,035 $ $ $ 288,421,700 $2,363,993,421 15.88 $4,727,986,842 50.0%
2006 1,266,935,505 730,413,466 180,564,805 251,293,200 2,429,206,976 15.88 4,858,413,952 50.0%
2007 1,354,989,247 728,343,561 195,703,073 221,858,408 2,500,894,289 15.88 5,001,788,578 50.0%
2008 1,437,051,392 765,233,437 192,915,386 223,995,750 2,619,195,965 15.83 5,238,391,930 50.0%
2009 1,479,089,611 719,463,319 254,539,254 205,034,000 2,658,126,184 15.83 5,316,252,368 50.0%
2010 1,480,467,389 713,807,797 248,288,931 220,228,175 2,662,792,292 15.70 5,325,584,584 50.0%
2011 1,407,920,589 624,406,132 215,099,428 199,543,400 2,446,969,549 15.70 4,893,939,098 50.0%
2012 1,387,390,250 639,535,400 87,432,000 183,233,681 2,297,591,331 15.70 4,595,182,662 50.0%
2013 1,232,109,181 587,002,900 86,884,400 151,900 182,543,900 2,088,692,281 19.70 4,177,384,562 50.0%
2014 1,152,931,800 580,539,700 85,938,200 151,900 2,900 182,024,000 2,001,408,500 19.70 4,002,817,000 50.0%
Source: Lansing City Assessor
180
CITY OF LANSING, MICHIGAN Table 6- Unaudited
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(rate per$1,000 of assessed value)
Fiscal City Direct Rates Overlapping Rates
Year
Ended Tax Operating Service City County School State College Other
June 30, Year Millage Millage Millage Millage Millage Education Millage Millage Total
(1) (2)
2005 2004 14.90 .98 15.88 8.10 20.65 6.00 3.84 8.83 63.30
2006 2005 14.90 .98 15.88 8.18 20.40 6.00 3.81 8.78 63.04
2007 2006 14.95 .93 15.88 8.72 20.32 6.00 3.81 9.15 63.88
2008 2007 14.95 .88 15.83 8.73 20.18 6.00 3.81 8.15 62.70
2009 2008 15.01 .82 15.83 8.87 20.15 6.00 3.81 9.04 63.70
2010 2009 15.44 .26 15.70 8.85 19.95 6.00 3.81 9.93 64.24
2011 2010 15.44 .26 15.70 8.84 19.95 6.00 3.81 9.93 64.23
2012 2011 15.44 .26 15.70 8.85 21.44 6.00 3.81 9.96 65.76
2013 2012 19.44 .26 19.70 9.49 21.73 6.00 3.81 9.96 70.68
2014 2013 19.44 .26 19.70 9.50 21.91 6.00 3.81 9.96 70.88
(1)rates for Lansing School District only
(2)includes Intermediate School,Airport Authority, Capital
Area Transit Authority and Capital Area District Library.
Source: Lansing City Treasurer
181
CITY OF LANSING, MICHIGAN Table 7-Unaudited
Profile of Ten Largest Ad Valorem Taxpayers
Current Year and Nine Years Ago
2014 2005
Percentage Percentage
Taxable of Total Total of Total
Assessed Assessed Assessed Assessed
Taxpayer Valuation Rank Valuation Valuation Rank Valuation
General Motors Corp. $81,468,000 1 4.01% $ 205,695,700 1 6.79%
Jackson National Life Insurance Company 32,771,500 2 1.61% 32,974,000 2 1.09%
Consumers Energy 22,283,300 3 1.10% 22,446,500 5 0.74%
Demmer Corporation 14,898,600 4 0.73%
Comcast of Michigan LLC 11,644,000 5 0.57%
Lansing Retail Center LLC 10,661,000 6 0.52% 16,317,300 6 0.54%
Heart of the City Assoc 7,271,400 7 0.36% 11,274,600 10 0.37%
Sprint Spectrum L.P. 9,496,000 8 0.47% 14,089,100 8 0.47%
Emergent Biodefense Operations 6,881,400 9 0.34%
Quality Dairy Co#17 6,759,700 10 0.33%
Accident Fund Company 14,265,700 7 0.47%
525 Redevco Inc 27,168,700 3 0.90%
Capital Outlook LLC 23,943,900 4 0.79%
Cricket Communications 13,198,200 9 0.44%
Data furnished from City of Lansing Assessor
182
CITY OF LANSING, MICHIGAN Table 8 - Unaudited
Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the
Fiscal Year of the Levy Total Collections to Date
Fiscal Year Taxes Levied Current Percent of Delinquent Total Collections
Ended for the Tax Levy Tax Tax as Percent
June 30, Fiscal Year Collection Collected Collection Collection of Levy
2005 $ 40,051,303 $ 39,429,093 98.45% $ 140,123 $ 39,569,216 98.80%
2006 41,261,397 41,022,735 99.42% 83,419 41,106,154 99.62%
2007 42,627,042 42,516,696 99.74% 107,322 42,624,018 99.99%
2008 44,286,657 44,125,517 99.64% 144,587 44,270,104 99.96%
2009 45,567,556 45,468,639 99.78% 72,779 45,541,418 99.94%
2010 44,997,919 44,844,495 99.66% 33,012 44,877,507 99.73%
2011 41,460,916 41,375,354 99.79% 24,416 41,399,770 99.85%
2012 39,948,762 39,863,393 99.79% 19,647 39,883,040 99.84%
2013 40,450,767 39,716,932 98.19% 55,532 39,772,464 98.32%
2014 39,336,952 39,238,902 99.75% 20,866 39,259,768 99.80%
Note: Amounts are net of chargebacks from the County Tax Revolving Funds for taxes still delinquent after three years.
Note: Delinquent Tax Collection represents amounts received in the indicated fiscal year.
Source: City of Lansing Treasurer
183
CITY OF LANSING, MICHIGAN Table 9-Unaudited
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities Business-Type Activities _
General e Special Installment General Total Percentage
>;
Fiscal Obligation Assessment Purchase Obligation Revenue Lease Primary of Personal Per
Year Bonds I Debt Agreements I Bonds Bonds 0 Purchases Government Income
(2)2005 $ 13,320,000 $ 35,000 $ 8,396,154 $ 1,543,195 $ 151,841,661 $ 52,604,302 $ $ 4,180,000 $ 231,920,312 10.88%11) $ 1,947 119,100
(2)2006 17,255,582 25,000 7,351,126 1,409,844 158,320,227 48,772,782 4,180,000 237,314,561 11.14%(Z) 1,993 119,100
(2)2007 20,128,052 10,000 15,721,844 1,772,049 156,536,857 44,787,045 4,180,000 243,135,848 11.42%11) 2,041 119,100
(2)2008 20,914,466 - 14,037,885 1,534,822 175,578,524 41,921,307 4,180,000 258,167,004 12.13%(Z) 2,168 119,100
(3)2009 17,899,203 12,394,082 1,290,479 189,210,199 39,045,570 4,180,000 264,019,533 12.41%11) 2,217 119,100
(3)2010 26,329,157 10,925,689 1,038,804 199,063,758 36,122,872 4,180,000 277,660,281 13.05%�Z� 2,331 119,100
(3)2011 27,804,224 9,564,693 779,580 197,000,901 33,209,092 1,574,209 269,932,699 12.17% 2,362 114,297
(3)2012 25,816,914 8,193,615 512,577 189,536,530 30,135,311 1,637,177 255,832,124 11.32% 2,238 114,297
(3)2013 29,994,604 2,807,838 6,246,743 180,359,931 27,528,327 1,702,664 248,640,107 11.010) 2,175 114,298
(3)2014 27,180,294 3,100,563 7,062,234 174,471,861 24,055,438 1,668,081 - 237,538,471 10.69% 2,078 114,298
(1)population per decennial census by the U.S.Census Bureau
(2)personal income data comes from U.S.Census Bureau,American Community Survey 2005
(3)personal income data comes from U.S.Census Bureau,American Community Survey 2009
184
CITY OF LANSING, MICHIGAN Table 10 - Unaudited
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Ratio of
Fiscal Debt Net Bonded Net
Year Service Debt Payable Debt to Bonded
Ended Taxable Gross Bonded Monies From Restricted Net Bonded Taxable Debt per
June 30, Population(') Value(3) Debt"' Available Revenues Debt Value Capita
2005 119,128 $ 2,363,993,421 $ 165,196,661 $ 4,400 $ 151,841,661 $ 13,350,600 0.0056 112
2006 119,128 2,429,206,976 175,600,809 88,826 159,920,227 15,591,756 0.0064 131
2007 119,128 2,500,894,289 176,674,909 309,363 162,596,857 13,768,689 0.0055 116
2008 119,128 2,619,195,965 196,492,990 256,144 184,442,624 11,794,222 0.0045 99
2009 119,128 2,658,126,184 207,109,402 186,636 197,225,199 9,697,567 0.0036 81
2010 119,128 2,662,792,292 225,392,915 126,434 206,198,758 19,067,723 0.0072 160
2011 114,297 2,446,969,549 224,805,125 46,029 203,225,901 21,533,195 0.0088 188
2012 114,297 2,297,591,331 215,353,444 - 194,911,530 20,441,914 0.0089 179
2013 114,297 2,088,692,281 210,354,535 178 184,849,931 25,504,426 0.0122 223
2014 114,297 2,001,408,500 201,652,155 - 178,031,861 23,620,294 0.0118 207
Source:2000 and 2010 Census by the U.S. Census Bureau
includes all general obligation debt and special assessment debt with governmental obligation
(3) the tax assessment day is December 31 prior to beginning of fiscal year
185
CITY OF LANSING, MICHIGAN Table 11 - Unaudited
Direct and Overlapping Governmental Activities Debt
As of June 30, 2014
Net General
Obligation Amount
Name of Debt %Applicable Applicable
Governmental Unit Outstanding to City to City
Net direct - City $ 37,343,091 100.00% $ 37,343,091
Share of County-issued bonds
Joint Building Authority $ 3,042,527 100.00% $ 3,042,527
Drain Commission 144,462 100.00% 144,462
$ 3,186,989
Overlapping debt
Eaton Intermediate School District 925,000 0.55% $ 5,088
Ingham Intermediate School District 2,002,000 23.31% 466,666
Waverly School District 36,730,000 0.23% 84,479
Lansing School District 43,525,000 81.35% 35,407,588
East Lansing School District 53,448,659 3.73% 1,993,635
Holt School District 75,456,667 2.46% 1,856,234
Ingham County 38,691,853 27.08% 10,477,754
Eaton County 38,691,853 1.63% 632,134
Clinton County 6,260,258 0.29% 18,155
Lansing Community College 77,855,000 19.27% 15,002,659
Okemos School District 20,656,000 2.32% 479,219
Mason School District 15,315,000 0.10% 15,315
Grand Ledge School District 58,635,000 1.18% 691,893
Total overlapping debt 67,130,819
Total direct and overlapping debt $ 107,660,899
Note: Overlapping debt percentages are apportioned based upon relative assessed values.
Source: Municipal Advisory Council of Michigan
186
CITY OF LANSING, MICHIGAN Table 12-Unaudited
Legal Debt Margin Information -
Last Ten Fiscal Years
Legal Debt Margin Calculation for Fiscal Year 2014
Assessed value,real and personal property $2,001,408,500
Assessed value equivalents 49,981,485
Total valuation 2,051,389,985
Legal debt margin
Debt limitation- 10 percent of total valuation 205,138,999
Debt applicable to limit
Total City Bonded Debt 223,943,286
City Share:
Drain Commission-County Issued 144,162
Joint Building Authority-County Issued 3,042,527
TIF Supported Bonds 17,074,155
244,204,130
Less:
Michigan Transportation(MTF)Bonds (3,560,000)
Sewage Disposal Revenue Bonds (21,765,000)
Pollution Abatement(CSO Project)Bonds (125,816,595) (151,141,595)
Total net debt applicable to limit 93,062,535
Legal debt margin $ 112,076,464
----------
Debt limit $ 302,811,105 $ 314,307,611 $ 324,987,531 $ 318,810,868 $ 298,581,799 $ 298,052,683 $ 268,975,768 $ 233,669,637 $ 208,869,228 $ 205,138,999
Total net debt applicable to limit 75,882,359 103,095,986 84,276,312 87,966,365 79,513,756 98,368,804 100,923,863 92,357,575 91,833,157 93,062,835
Legal debt margin $ 226,928,746 $ 211,211,625 $ 240,711,219 $ 230,844,503 $ 219,068,043 $ 199,683,880 $ 168,051,905 $ 141,312,062 $ 117,036,071 $ 112,076,164
Total net debt applicable to the limit
as a percentage of debt limit 25.06% 32.80% 25.93% 27.59% 26.63% 33.00% 37.52% 39.52% 43.97% 45.37%
187
CITY OF LANSING, MICHIGAN Table 13 - Unaudited
Pledged-Revenue Coverage
Last Ten Fiscal Years
Sewage Disposal Bonds
Direct Net Revenue
Gross Operating Available for Debt Service Requirements
Revenue Expenses(') Debt Service Principal Interest Total Coverage(2)
2005 $ 26,601,646 $ 12,775,001 $ 13,826,645 $ 3,715,000 $ 1,786,328 $ 5,501,328 2.51
2006 27,932,464 12,867,761 15,064,703 3,805,000 2,036,736 5,841,736 2.58
2007 29,292,698 13,494,658 15,798,040 3,950,000 2,152,990 6,102,990 2.59
2008 29,356,299 15,997,449 13,358,850 2,830,000 2,002,400 4,832,400 2.76
2009 27,759,684 14,206,961 13,552,723 2,840,000 1,900,000 4,740,000 2.86
2010 28,613,004 12,358,472 16,254,532 2,840,000 1,803,425 4,643,425 3.50
2011 29,865,648 12,616,100 17,249,548 2,925,000 1,621,221 4,546,221 3.79
2012 30,178,511 12,562,663 17,615,848 3,040,000 1,448,856 4,488,856 3.92
2013 31,169,428 12,112,994 19,056,434 3,160,000 1,111,390 4,271,390 4.46
2014 31,996,794 13,424,901 18,571,893 3,265,000 1,054,878 4,319,878 4.30
Operating expenses less depreciation
Coverage is defined as net revenue available for debt service divided by
debt service requirements
188
CITY OF LANSING, MICHIGAN Table 14- Unaudited
Demographic and Economic Statistics
Last Ten Fiscal Years
Per capita Lansing School
Personal Personal Median District Unemployment Labor
Year Population(') Income Income(z) Age(3) Enrollment(4) %Rate(5) Force(5)
2005 119,100 $ 2,131,183,101 $ 17,894 32.2 16,201 9.0% 68,041
2006 119,100 2,130,460,800 17,888 32.4 16,014 8.4% 67,023
2007 119,100 2,129,750,646 17,882 32.5 15,178 8.9% 66,224
2008 119,100 2,129,040,730 17,876 32.7 14,475 10.2% 65,833
2009 119,100 2,128,331,049 17,870 32.8 14,482 16.2% 66,822
2010 119,100 2,127,621,606 17,864 32.9 14,098 15.0% 64,074
2011 114,297 2,218,237,360 19,408 30.4 13,465 13.1% 63,130
2012 114,297 2,259,194,502 19,766 32.4 13,236 11.3% 63,374
2013 114,297 2,259,194,502 19,766 32.2 12,544 11.9% 63,181
2014 114,297 2,221,933,680 19,440 32.2 12,088 9.1% 63,102
(')Source: U.S. Census Bureau
�L Source: personal income for 2000 and 2005 from the U.S. Census Bureau; other years were extrapolated
from 2000 and 2005
Source: 2000 data from U.S. Census Bureau. Data for other years estimated by City of Lansing Finance Department
(4)Source: Lansing School District
(')Source: Michigan Department of Career Development: Employment Service Agency- Labor Market Information
189
CITY OF LANSING, MICHIGAN Table 15-Unaudited
Principal Employers
Current Year and Eight Years Ago
2014 2006
Percentage Percentage
of Total City of Total City
Employer Employees(') Rank Employment(2) Employees(') Rank Employment
State of Michigan 13,700 1 6.11% 13,000 1 6.09%
Michigan State University 10,725 2 4.78% 10,500 2 4.45%
Sparrow Health System 5,735 3 2.56% 6,000 4 2.54%
General Motors 5,522 5 2.46% 6,300 3 2.67%
Liberty National Life Insurance 5,000 4 2.23%
Lansing Community College 2,990 6 1.33% 3,800 5 1.35%
McClaren Greater Lansing 2,400 7 1.07% 2,500 7 1.06%
Meijer 1,880 8 0.84% 2,000 8 0.85%
Lansing School District 1,613 9 0.72% 3,000 6 0.89%
Auto Owner's Insurance 1,500 10 0.67% 1,500 9 0.64%
Peckham, Inc. 1,400 11 0.62%
Jackson National Life Insurance 1,393 12 0.62%
Ingham County 1,200 10 0.52%
Greater Lansing metropolitan area employment 224,197
Data is representative of the Greater Lansing Region
Z Source: Michigan Department of Career Development: Employment Service Agency- Labor Market Information
Data prior to 2006 is unavailable
190
CITY OF LANSING, MICHIGAN Table 16-Unaudited
Full-time Equivalent City Governmental Employees by Function/Program
Last Nine Fiscal Years
Function/Program 2014 2013 2012 2011 2010 20IMM MMINWM MMqMW Mi
General government
City council 10 10 10 11 11 11 11 11 11
Mayors office 5 5 5 5 5 5 5 5 7
City clerk 5 5 5 6 7 7 7 7 7
54-A district court 43 43 48 50 53 53 53 55 55
City attorneys office 10 10 10 11 12 12 12 12 11
City TV 2 2 2 2 2 2 2 2 2
Internal auditor 1 1 1 1 1 1 1 1 2
Human resources 10 9 9 11 12 13 14 14 (1) 12
Information technology 11 10 10 14 15 17 18 18 18
Finance
Accounting/Budget/Purchasing 10 10 13 14 16 17 16 18 (1) 21
Tax services 20 20 21 22 24 25 26 29 30
Property management (6) 18 20 21 23 24 26 (3) 28
Fleet management (6) 27 29 30 31 33 37 (`) 20
30 30 79 99 106 113 117 128 117
Planning Et neighborhood development
Administration 2 2 2 2 2 2 2 2 2
Code compliance a) 15 15 16 16 16 17 19 15
Building safety 13 12 13 15 15 15 15 16 17
Planning 4 4 4 5 5 4 5 7 7
Development 11 9 9 9 9 10 10 10 11
Parking 23 transportation 15 20 20 20 (5) 40 41 41 43 49
45 62 63 66 87 88 90 97 101
Police 234 (a) 229 (') 260 327 344 342 341 338 339
Fire 188 180 179 207 218 219 219 219 220
Code compliance 14 (a)
Public services -
Administration£t engineering 19 19 21 21 17 18 18 18 19
Operations Et maintenance 117 (") 120 121 135 (') 110 113 113 119 122
Service garage - - - - - - - 17
Wastewater 41 41 41 41 44 50 50 51 61
Property Management 18 18 (6)
Fleet Management 27 27 (6)
222 225 183 197 171 181 181 188 219
Human relations 8 community services 6 5 5 5 5 6 8 9 9
Parks li recreation
Administration l3 design 6 5 5 5 7 7 8 8 9
Grounds 8t forestry 27 31 32 32 (`) 32
Leisure 8 special recreation 6 8 10 12 15 19 17 19 ') 20
Cemeteries 1 1 1 1 3 4 4 5 5
Golf/ice arena 3 3 3 4 4 4 4 4 6
Zoo(4) - - - 18 19
16 17 19 22 56 65 65 86 91
827 833 878 1,020 1,090 1,118 1,126 1,172 1,203
Source: The City of Lansing
Data available back nine years only
In FY 2007,the following restructuring of departments occurred:
(1)A payroll position was transferred from Finance to Human Resources
(2)Operations Of the City's three fleet garages was consolidated in Finance
(3)Four custodial positions were transferred from Parks it Recreation to Finance
(4)on Jury 1,2007,Potter Park Zoo employees were transferred to Ingham County
In FY 2011,the following restructuring of departments occurred:
(5)Grounds Maintenance positions were moved from Parks li Recreation and Planning tt Neighborhood Development and consolidated with Public Service staff
In FY 2013,the following restructuring g of departments occurred:
(6)Fleet and Property Management were moved from the Finance Department to the Public Service Department
(7)on June 27,2012,911 Dispatch employees were transferred from the City to Ingham County
In FY 2014,the following restructuring g of departments occurred:
(8)Fourteen(14)positions are transferred from PND to Fire;four(4)to Police,and one(1)to Public Service for FY 2014
191
CITY OF LANSING, MICHIGAN Table 17-Unaudited
Operating Indicators by Function/Program
Last Nine Fiscal Years
Function/Program 2014 2012 2011 ' 20'
Public safety
Fire department responses 19,427 18,444 17,093 16,974 16,659 15,852 15,780 15,267 14,869
EMS related 16,235 15,918 14,851 14,628 14,398 13,447 13,151 12,779 12,152
Fire related 3,012 2,526 2,242 2,346 2,261 2,405 2,629 2,488 2,117
Police department responses 76,855 73,087 74,058 78,112 87,724 89,958 87,634 97,466 87,551
Arrests 5,656 7,196 8,043 8,858 11,644 11,559 12,810 13,260 7,479
Traffic violations 7,756 14,905 8,829 15,585 18,297 20,122 25,398 29,047 30,948
Public works
Potholes filled 55,193 33,155 30,116 32,918 24,945 43,601 40,790 28,122 36,522
Streets resurfaced(miles) 4.60 6.00 5.01 8.99 20.70 16.20 20.92 22.11 27.16
Recreation
Recreation participation 50,859 55,122 66,836 66,254 70,529 39,060 37,783 ' 41,069 38,878
Pavilion rentals 185 199 198 161 288 315 341 254 255
Sewage disposal
Average amount processed daily(gal) 14.49 million 14.75 million 12.82 million 12.83 million 15.01 million 18.15 million 16.73 million 16.00 million 15.00 millio
Parking system
Average number of monthly permits 2,891 2,718 2,735 3,122 3,480 3,783 4,059 3,905 4,073
Parking tickets issued 34,373 38,127 41,829 45,176 63,610 66,183 57,153 75,637 82,221
Cemetery
Lots sold 93 113 115 143 142 119 98 114 104
Golf
Annual rounds played 22,786 25,554 28,560 26,084 30,936 41,588 43,605 ` 59,244 57,256
Garbage and rubbish
Yards sent to landfill 18,829 17,985 18,705 20,334 21,805 29,322 29,869 30,402 30,517
Recycling
Recycled goods sold(tons) 5,075 3,562 3,149 2,446 2,163 2,591 2,818 2,269 2,441
Yards composted 25,260 21,832 20,413 15,725 21,819 21,871 21,928 17,189 21,304
Source: The City of Lansing
Data available back nine years only
" The addition of the Southside Community Center,with a pool,resulted in a large increase in recreation participation in FY 2010
" Two golf course were closed in FY 2008 with one of those being converted to a driving range
Source: City of Lansing
192
CITY OF LANSING, MICHIGAN Table 18-Unaudited
Capital Assets Statistics by Function/Program
Last Nine Fiscal Years
Function/Program 2014 2013 2012 2011 2010 2009 2008 2007 2006
Public safety
Police stations 2 2 2 3 3 3 3 3 3
Police patrol units 61 60 60 58 61 61 58 55 55
Fire stations 6 6 6 8 9 9 9 9 9
Public works
Streets(mites) 411.00 411.00 407.80 410.80 410.63 410.15 410.15 410 409.89
Traffic signals 200 204 204 208 203 196 203 188 194
Recreation
Park acreage 2,364.85 2,364.85 2,434.88 2,422.63 2,422.63 2,422.63 2,422.63 2,219.63 2,219.63
Playgrounds 72 75 73 71 71 82 82 80 76
Baseball/softball fields 61 61 61 61 61 61 61 61 61
Soccer/football fields 6 6 6 6 6 6 6 6 6
Community centers 4 4 4 4 4 4 4 4 4
Sewage disposal
Sanitary sewers(miles) 359 359 359 359 357 354 347.4 341.0 338.0
Storm sewers(miles) 234 234 234 234 233 230 225.1 220.0 217.0
Combined sewers(miles) 188 188 188 188 191 192 197.4 203.0 208.0
Parking system
Ramps 4 4 4 4 4 4 6 6 5
Lots 17 18 15 15 16 16 15 15 15
Meters 21452 2,452 2,452 2,452 2,493 2,493 2,489 2,489 2,489
Cemetery
Number of cemeteries 3 3 3 3 3 3 3 3 3
Golf
Number of courses 1 1 1 1 1 1 1 b 3 3
Acreage 115 115 115 115 115 115 115 b 318 318
Garbage and rubbish
Refuse collection trucks 17 17 19 22 18 16 21 21 20
Recycling
Recycling trucks 7 7 7 9 10 10 10 10 10
Potter park zoo
Number of animals N/A N/A N/A N/A N/A N/A N/A a 398 403
Source: The City of Lansing
Data available back nine years only
a. Zoo operations were transferred to Ingham County in FY2008
b.Two municipal golf courses were non-operational beginning in 2008
193